I saw this post by Filth Wizardry about teaching her daughter how to sew by using shelf liner, needles, and yarn. I thought that was a great way to do it. She drew on the shelf liner where her daughter would sew and let her do it.
This is a close-up of what her daughter finished. Pretty good job!
If you would like to know how she did it and her explanation go here: Sewing and Embroidery for Kids.