Take your round button and trace it onto your fabric with a pen. Cut out the shape.

Apply a liberal layer of Modge podge onto your button's face and press your cut out fabric shape onto it.
Allow to dry.
After it has dried, apply a thin layer of modge podge on top.
Also allow this to dry.

With the hot glue, attach the ring backing to the fabric coated button.
If you want, you can now use sparse amounts of hot glue to attach chain or rhinestones or other embellishments as well.

Model your marvelous creation! Beautiful darling, beautiful!

Viola! Done.