It could be diabetes. My first Cairn Terrier started drinking large amounts of water and urinating frequently at age 9 and 1/2. I took him to the vet and they diagnosed diabetes. I gave him insulin shots twice a day for the next 3 and a half years before his health started failing and he had to be put down.
He's most likely having a kidney problem due to age. The excessive thirst and frequent urination are good signs. You should talk to your vet to be sure.