A direct translation is "that's right, please scratch my penis"
We all know what "ちんちん" means (maybe) but "かいかい" means to scratch or "please scratch".
Now you know....is what I'd like to say but Japanese has a lot of words like this that could come off wrong.
Whilst it sounds like that, what he was trying to say is "yes , sit, cute" something along those lines.
It's a kinda pun
Now you really know.
Ok so I asked my wife and from what I heard he is actually yelling the dog to scratch it's penis so yeh. Apparently is something like a performance for a dog to do as people find it funny.
These are the exact words from her and she is Japanese so yeh....