From Webkinz Insider Wiki
Inside rooms are rooms that any pet can obtain. When you adopt a pet that neither swims or flies you receive a medium size inside room. You can place almost anything in them except outdoor or undersea or treetop items.
Purchasing A Room
To purchase a room click on the "House Map" icon in the upper left corner of your room. Then once you are in the map, click on the "Buy A Room" button and pick your size of room.
To see other types of rooms that can be added to your Webkinz House, visit Room Types.
Sizes and Prices
Inside rooms come in three sizes. Small (5x5), Medium (7x7), and Large(10x10).
This is a small room, it costs 500 KC to purchase.
This is a medium room, the room you originally get when you adopt a pet. This room costs 700 KC.
This is a large room, it costs 1,000 KC to purchase.