Is there a way to add Relaunch command to application popup in Dock?
I don't think so, but here are some shortcuts.
For the Finder, you can actually option-right-click (or option-control-click) on the icon and it will display a relaunch option. For applications that don't exist in the dock normally, you can show them in the Finder with a command-click of the dock icon, and then quit normally. Showing the item in the Finder will let you easily restart it.
If necessary, you can also display a force-quit item by option-right-clicking any item that isn't the Finder.
For the absolute fewest possible clicks to relaunch, command-click the item in question, command+tab so that the item is selected, and before releasing command, hit q to send it a quit instruction. Still holding command, tab or ` back to the Finder (release command now), then hit command+↓ or command+o) to launch the application that will be selected from your Show in Finder command issued earlier. One click—everything else is keyboard.