**Core Concept**
The question is testing the understanding of the genetic basis of morphogenesis, a fundamental process in embryonic development. Morphogenesis is the complex interplay of cellular and tissue movements that shape the developing embryo, ultimately leading to the formation of its final structure and function. The gene responsible for regulating this process is a crucial regulator of embryonic development.

**Why the Correct Answer is Right**
The gene that regulates normal morphogenesis during development is **Sonic Hedgehog (SHH)**. SHH is a key signaling molecule that plays a pivotal role in the regulation of morphogenesis by regulating the expression of target genes involved in cell fate determination, cell migration, and tissue patterning. SHH signaling is essential for the development of various organs and tissues, including the neural tube, limbs, and digits. Activation of SHH signaling leads to the activation of its downstream target genes, including those involved in the Wnt/β-catenin and Notch signaling pathways.

**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect because it does not specify a gene that regulates morphogenesis. While **PAX6** is an important transcription factor involved in development, it is not the primary regulator of morphogenesis.
**Option B:** This option is incorrect because **FGF8** is a growth factor involved in various developmental processes, but it is not the primary regulator of morphogenesis.
**Option C:** This option is incorrect because **TGF-β** is a cytokine involved in cell growth and differentiation, but it is not the primary regulator of morphogenesis.

**Clinical Pearl / High-Yield Fact**
Morphogenesis is a critical process in embryonic development, and abnormalities in SHH signaling have been implicated in various congenital anomalies, including holoprosencephaly and limb abnormalities. SHH signaling is also important in the regulation of stem cell maintenance and differentiation, making it a potential target for cancer therapy.

**Correct Answer:** C. Sonic Hedgehog (SHH)