It looks like a rock its atached to his skin and its sqwishy

Sounds like maybe a cyst? Can you take a picture?

Has your dog been "chipped", in case it ever gets lost? It may be coming out. Your description fits.

See your vet.

A picture would be nice.
Check to see if the "thing" has legs, it could be a tick.
In any case, tick or cyst, don't pull at it.
IF it is a tick you can soak a cotton ball with dish soap.
Hold it snugly over the tick for 30-45 seconds after washing around it with the cotton ball, the tick should release and come off or you can go have a vet or technician remove it at your vet clinic.
Never just pull it off, it could result a nasty little infection at the site.
Be aware also of tick borne illness, here is some info.

http://www.petmd.com/dog/slideshows/...t#.UgbLKNLVDSs