The correct answer is option 'C' - Cerebral ganglia.

The cerebral ganglia, also known as the brain, is a prominent structure in the earthworm's nervous system. It is responsible for controlling and coordinating various activities in the worm's body. Additionally, it has the ability to secrete hormones.

Hormones are chemical messengers that are produced by specific organs or glands in the body. They are responsible for regulating various physiological processes and maintaining homeostasis. In earthworms, the cerebral ganglia play a crucial role in the production and secretion of hormones.

The hormones secreted by the cerebral ganglia in earthworms are involved in various functions, including reproduction, growth, and development. They help regulate the reproductive cycle, control the growth of the worm, and coordinate the development of different body parts.

The secretion of hormones by the cerebral ganglia is controlled by different factors, including environmental cues and internal physiological signals. For example, the presence of suitable environmental conditions and the stimulation of specific sensory receptors can trigger the secretion of reproductive hormones.

The hormones produced by the cerebral ganglia are then released into the circulatory system of the earthworm. They are transported to different parts of the body, where they bind to specific target cells or tissues. Once bound, the hormones initiate a series of biochemical reactions that lead to the desired physiological response.

In summary, the cerebral ganglia in earthworms are capable of secreting hormones. These hormones play a vital role in regulating various physiological processes, including reproduction, growth, and development. The secretion of hormones by the cerebral ganglia is controlled by both environmental and internal factors, ensuring the proper functioning and coordination of the worm's body.