An LM317 is often used as a current limiter for a power supply but you must allow about 3V across it for normal operation which increases the required input voltage and dissipation for a given current and load voltage. This circuit is a little more complex but it can generate a voltage drop of less than a volt (about one base-emitter voltage drop) during normal operation depending upon the current limit range.
The circuit below uses a P-MOSFET as the current limit element and a PNP to detect the voltage drop across the shunt resistor R1. When the voltage reaches the base-emitter turn-on voltage of the PNP it conducts to reduce the MOSFET gate-source voltage and cut off the MOSFET at the current limit point.
Current Limit PMOS Adj 2.asc (LTspice)
This current limit can be adjusted over a limited range by the pot U1. At the minimum current setting (pot wiper fully right) the drop across R1 is about 0.7V giving a current limit of about 7A for the R1 value shown. As the pot wiper is moved to the left, the voltage across R1 is reduced by the divider action of U1 and R3 and the current limit (and voltage across R1 at the limit) goes up. This simulation shows the change in current limit as the wiper position is changed.
The P-MOSFET should be selected for the current limit you require. It's maximum current and voltage rating should be at least 150% of the maximum current and voltage it will see. For 5V operation or less the MOSFET should be a logic-level type. During normal operation (non-current limit region) the drop across the MOSFET will be equal to its ON resistance times the current, which will be quite small for an adequately sized MOSFET.
Q1 can be just about any general purpose PNP BJT with a voltage rating at least 150% of the maximum input voltage.
The value of R1 determines the minimum current limit that the circuit will carry with a value of R1 ≈ (Imin / 0.7). For the pot and R3 resistance values shown, the current limit can be adjusted from slightly less the 7A to about 12A.
The value of R2 and R4 should be selected to keep the MOSFET gate-source voltage below its maximum rating (typically about 20V or so) which occurs when Q1 is off under non-current limit operation.
The current limit is somewhat temperature sensitive, dropping about 0.28% for each degree C rise in the temperature of Q1 due to the base-emitter voltage change of Q1, but that typically is not a problem since it reduces the current limit at higher temperatures where heating effects in the current limited load can be of more concern.
Note that for a continuous short-circuit the power dissipation in the MOSFET can become quite high, depending upon the current limit and input voltage, and thus may require a heat sink. The power dissipated in R1 must also be considered, which is highest at the maximum current limit setting.
The Out load can be the input to a linear or switching regulator to protect those from a short circuit at their output. Of course it can also be used to limit the current to any other type of device such as a resistive load or motor.
Adjustable Low Drop Current Limiter
Current limiter with max voltage drop of ~1V during normal operation, minimizing dropout voltage.