Since she has a dog too and said that about your dog - you could say: "Yes I could enter him in an Ugly Dog contest but he'd only come in second... AFTER your dog takes first place!" That was just a stupid thing for her to have said in the first place! I honestly think
he is very C U T E!
And re tongues hanging out - there doesn't have to be anything wrong with a dogs teeth or mouth for them to hang their tongues out all the time. My 2-year-old Shih Tzu hangs his tongue out 24/7/365. When I had him at a vet clinic last fall - the "experienced" vet took one look at him (for the first time ever) and said: Oh, he must be missing teeth. I said: Why? And she replied: Because his tongue is hanging out. I said it always did since I got him at 12 weeks of age. She checked his mouth and said: Nope, he has a perfect mouth - must just be a habit for him. Charlie still hangs his tongue out everyday even when he is sleeping. It makes him unique!
