"Cherry Eye" or Glandular hypertrophy  is simply an enlargement of the gland of the third eyelid with resultant prolapse. Cocker spaniels and bulldogs seem to be predisposed to this disorder. Cherry eye is also commonly seen in Beagles,  Bloodhounds, Great Danes, Lhasa Apsos, and Basset hounds.  

Typically it occurs is dogs less than one year old.  I personally have seen some as early as 8 weeks and as late as 10 years of  age.  An inflammation and/or a lack of connective tissue bands which hold the gland in place,  are thought to be causes of this condition.  Typically trauma does not cause this but; many experts believe there is a genetic component to developing this problem.  Some data indicates that it may be a simple recessive mode of transmission.

Treatment may consist of simple application of an appropriate ophthalmic ointment and reduction of the prolapse by your veterinarian.   I have seen only one cherry eye stay in, once placed back in its proper position and  treated with ointment only.( to reduce the swelling .)  Typically they will pop back out and then you must surgically treat them.  Since 30% of the dog's tear production can come from the involved gland-you must discuss each option with your veterinarian carefully.  DRY EYE or keratoconjunctivitis sicca (KCS)  can result from its removal. Since beagles are prone to develop DRY EYE -this is a major reason to not surgically remove the gland.  Although this is a method used widely in the US.

The two methods for surgical treatment are:
1.  TACKING--this method is when a properly trained veterinarian (not all vets are trained in this procedure) surgically sutures the gland back into its normal position.  The tear production is not altered with this method.  There is chance that the cherry eye will pop back out.  Some resources have it at 10-30% reoccurrence rate.

2.  REMOVAL--this method is quick and usually a cautery procedure is used.  The gland is removed.

Here are two good links concerning this problem: