I'm going to try to summarize here what's in the comments.
くすぐったい is an adjective.
がる has the sense of "putting on an appearance" or "pretending". From this sense, we can parse
as putting on an appearance of being ticklish. But, my sense is also that this could then be understood as "acting as if he were being tickled".
彼女 witnessed this. And that brought her to tears.
So the sentence would mean something like,
He acted like he was being tickled to the point that she cried.
Considering what @aguijonazo wrote in the comments to the question, this could perhaps also be construed as
He acted [so much] like he was being tickled that she cried.
Where "acted so much like he [was being] tickled" corresponds to くすぐったがりすぎて.
I would imagine this is one of those situations where folks tease back and forth so much that you're both laughing and perhaps so hard you start crying.