Even dogs have belly button. However, some breeds are predisposed to have bigger and more prominent one like on Shih Tzus. This condition is believed to be inherent so parents are not recommended to breed to stop this. It is generally normal and can even close at an early age. It will also not cause any alarm if the size is small or negligible. The problem will arise if the opening becomes large and cause intestinal strangulation. If the intestine become twisted or trapped in this opening, the blood supply will be cut off and may cause necrosis. It is considered an emergency situation and surgery should be performed. For more helpful diagnosis, sonogram and radiographs can be done.