I crocheted simple shapes for the eyes, and stitched them on the same way I stitched the body together. For the standard Squiddles, I added an extra stitch of white to the eyes after attaching them. The mouths I just embroidered in.

For this later set, I cut out felt shapes of about the right size and hot-glued them down. I added the eye dots with a bit of acrylic fabric paint.

I prefer the final effect of the felt version, but the yarn version is great for if you don't have hot glue or aren't comfortable with it.