After describing the killer, the taxi driver said he had seen young children “just screaming”.
“That’s when I shot off then,” he added, referring to himself leaving the scene.
Mr Poland is due to give evidence on Thursday.
Det Ch Insp Pye praised the actions of members of the public who helped the victims of the attack.
They included window cleaner Joel Verite, who rushed in with the first officers on the scene – Sgt Greg Gillespie, PC Luke Holden and PCSO Tim Parry.
The inquiry was told Mr Verite carried six-year-old Bebe King’s body out of the building, and had also earlier carried Alice Aguiar from where she had collapsed in the car park further down the street to get help.
He removed his t-shirt to help stem the bleeding, the inquiry heard.
Det Ch Insp Pye said the public response was an example of “bad meeting good”, and added: “People may have seen on TV how chaotic the scene was outside, but there was lots of good people and it’s only right that we recognise the work that those people did.”
The inquiry was also told how the attacker’s phone was recovered from the crime scene after his arrest, and was found to have the precise address of the dance studio, at 34a Hart Street, saved as a contact.
Det Ch Insp Pye said he believed Rudakubana had saved the address after spotting an advertisement for the Taylor Swift-themed dance class on Instagram.
The inquiry continues.