12 year old foxterrier.

More info please :)

12 is getting on in years for a Foxie, I would definitely be getting a vet do some some bloodwork.
There are quite a few things that can cause excess water consumption, some minor like diabetes, some major like liver failure.
I would take a guess and say the incontinence is caused by the fact he is drinking more, and because of his age he is having trouble holding all that extra liquid in... they are more than probably not linked to the same illness.

As I understand it the dog (a 12 year old fox terrier) is drinking more water and having difficult controlling his urine.

I agree with Shaz - a trip to the Vet. Something is undoubtedly causing the excessive water drinking and then your dog is having a problem because of all that water in his system. Could be as simple as a bladder infection.