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Felt is a great material to use with toddlers.  It is safe, soft and flexible.  You will need some sewing skills to make some of the props described below.

CROWNS - You can make fun crowns by cutting felt into 10” circles, then folding the circle in half and cutting out from the center to within one inch from the edge (three or four times forming triangle shaped points.  Children can easily slip these on over their heads to create pointed crowns.
ELF CAPS – You can make felt pointed caps for your children by cutting out two felt triangles (12 or more inches tall) and then sewing together the two sides.  A yarn pom can also be sewn to the top point.  Children can slip these pointed caps on and pretend they are busy holiday elves.

The easiest vest to make for young children is to cut out a rectangular piece of felt (approximately 18” x 30”).
Then fold the felt in half and cut a half circle out in the center of the fold for a head hold.
These vests can be left as is, or a slit can be cut down the front and the two sides can be held together by sewing a thin strip of felt from the front flap to the back flap on each side.
Take a large piece of cardboard and cover it with felt on one side.
Then securely prop it up on a wall.
Cut out holiday items, houses, animals or trees from felt.
Set out the felt cutout and the board and let your children attach and remove the felt pieces as they wish.
Simple cutouts are best for younger children.
Fewer cutouts are best for younger children.

Cut out two (child-sized) felt mitts, then stack one on top of the other.
Sew around the outside edges of the puppet, leaving the bottom edges open.
Show your child how to slip it onto his hand and pretend it is a character.
Marking pens can be used to add facial and other features to the puppet.

Cut out felt shapes in sets of two.
Sew around the shape sets leaving a small opening on one side.
Stuff the openings with stuffing material.
Then hand sew the openings.
Let your children play with these felt pillows.

Felt bean bags are made just like the pillows.
Just cut out sets of 5” squares and sew and stuff.
These are great for tossing games.

One of my pet peeves has always been that doll clothes are almost impossible for young children to take on and off.  I always found that simple felt doll vests, capes, hats, skirts and pants were best.  When things need to close, Velcro was the answer.

When my children were little, it was almost impossible to keep them from the Christmas tree.  I solved the problem by making and buying felt ornaments and adding them to the lower branches of the tree.  My children would spend hours playing with the felt ornaments and best of all, they left the higher ornaments alone.  Give it a try!
Make or buy colored cardboard picture frames for your children.
Then cut out small holiday symbols from felt.
Let your children decorate the frames by gluing on the felt cutouts.
Small poms could also be added for holly berries or tree ornaments.
Place a picture of the child behind the frame and give the frames to family and friends.
Cut out large felt stocking shapes and sew up the sides, leaving the top open.
Let your child decorate the stocking with felt cutouts.
These can be used the child herself or they can also be given out as gifts.