The rubber washer inside the vacuum breaker has failed and needs to be replaced. This is accomplished by unthreading the vacuum breaker from the body of the hydrant and replacing the internals. The vacuum breaker is sealed to the body with a body sealant and may require heat to break loose.
The parts required for this is a C-434KT-906 Vacuum Breaker Replacement Kit
To repair the vacuum breaker on any of the above items, it first needs to be removed from the valve. The vacuum breaker is sealed to the valve and needs to be heated with a torch to be removed. Once it is removed you can reinstall the new parts in the order as shown above.