Final Image Preview
Magnifying Glass Image can be found here
Text Background image can be found here
Go to File > New (set the settings to match the picture below)
Add your image or text you want to apply the Magnifying Glass Effect to.
Go to Layer > New > Layer
Select the elliptical marquee tool and draw a circle on your image or text where you want your Magnifying Glass Effect.
Now colour the circle in black.
On the layer your created right click on it and go to blending options
Set the setting to match the below pictures
Bevel and Emboss
The circle you created in step should still be selected.
Now click on your image or text layer and go to Filter > Distort > Spherize
Set the Amount to 75%
Then you could add a Magnifying Glass frame around the Circle.