Compose a simple story about three bears. The traditional story is too long and complicated for a toddler.
Here is a possible story:
Once upon a time there were three bears: one [hold up one finger], two [hold up two], three [hold up three]. They came to Mary's house [substitute your child'sname] to ask Teddy to come and play. Mary and Teddy invited them in for milk and cookies and play with blocks.
After telling the story, set out three cups and three cookies.
Repeat the story, and this time, act it out. If you do not have three teddy bears, use any stuffed animal or even a toy.
Invite the bears in for milk and cookies. Pretend that they are drinking the milk and eating the cookies.
Get out the blocks and pretend that everyone is playing with them.