First they drew a simple picture of what they wanted.
Then we traced it onto Muslin Fabric with a pencil.
Afterwards, we got some fabric and cut around the animal. I sewed right sides together leaving a small hole and we stuffed it with cotton. Then I stitched up the hole. Not so adorable but the fact that it is stitched by them is priceless. (It would also be cute to frame a picture on fabric that was embroidered by your kids)