Basket? Yes, it spawns the next day after the event on the floor xD. From the king you can get a doll - Fan doll of Queen Eloise :)
"If you are lucky, a Dog LadyDog Lady might appear in the Rain Castle after the next server save. While the Dog Lady is in the castle, you might encounter a Basket of Puppies on the floor of the throne room." - TibiaWikia