Step 1: Understanding the Concept:
Canine cryptorchidism increases the neoplastic transformation risk of testicular Sertoli cells by over 13- to 23-fold due to elevated abdominal temperature.
Step 2: Detailed Explanation:
Oncogenesis of canine Sertoli Cell Tumours (SCT):
- Sertoli cell tumors originate from the sustentacular supporting cells of the seminiferous tubules in male dogs.
- Intra-abdominal or inguinal cryptorchid (retained) testicles are exposed to core body temperature ($38.5^\circ\text{C}$), which causes progressive germ cell atrophy and increases the risk of neoplastic transformation by $13 - 23\times$ compared to scrotal testes.
- SCT occurs most commonly in older cryptorchid dogs (around 6 to 10 years of age), secreting estrogens that trigger male feminizing syndrome (bilateral symmetrical alopecia, gynecomastia, pendulous prepuce).
Step 3: Final Answer:
Therefore, Sertoli Cell Tumour is most likely to occur In retained testicle of 7 year old dog, matching option (C).