Hello,
The best thing to do is to set up a appointment with your vet. The fact is these really should be looked at when they get big like this as they can be cancerous. Either way your vet can remove it and give her the much needed relief from the irritation of having it on her. These can be sore and painful for your dog and its often better to have them removed.
Walter
This can happen somethings, but it isn't very common and typically it spreads only when it has not been properly cared for during the healing process. If the dog is able to lick or scratch at it after removal then it is almost always going to cause problems like that. If your careful to keep it clean and give it adequate heal time there isn't any real concern with it spreading.
Unfortunately that is about the only thing that can be done other then to keep it covered and wait it out.
Breeder
Breeder and pet health consultant. Have spent a number of years with dog rescue, training and health