It's called Crapa Pelada, which translates to 'bald head'. It was written in 1936 by italian composer/lyricist Gorni Kramer, based on an old italian nursery rhyme.
The song title and main chorus are in Milanese (the dialect of the Italian city of Milan). The version used in the episode was recorded in 1945 by italian vocal group Quartetto Cetra; the beginning of the song is sung in Italian, while the main chorus in Milanese. The lyrics of the song's chorus is as follows:
Crapa Pelada la fà i turtei,
ghe ne dà minga ai sò fradei.
I sò fradei fan la fritada.
ghe ne dan minga a Crapa Pelada.
Oh! Oh! Oh! Oh!