For detailed practical pointers on reading with young children, Susan Marx and Barbara Kasok have written Help Me Get Ready to Read. They describe about 275 titles that work particularly well with kids in their first five years. They also highlight six books with activities that model getting into stories: Blue Goose, Hooray for Fish!, One Duck Stuck, The Snowy Day, Sheep in a Jeep, and Puffins Climb, Penguins Rhyme.
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For "Follow-Up Fun," kids can pretend to ride in a jeep, sing "Baa, Baa, Black Sheep," make a sign, and read more books about animals--including Sheep Take a Hike. And for the kids' responses, Kasok and Marx offer "Positive Parenting Praise!": "Good job telling about the jeep." See readaloudguide.com for information on the book and the workshops they offer.