Research shows that it helps a lot.... My favorite personal anecdote is of a Dutch street musician I was friendly with who spoke excellent English. He'd left school at 15 and had been in a total marijuana haze for a decade. One day I asked him how he spoke English so well and he told me in perfectly accented English that he had spent most of his teens sitting around the house stoned watching tv in English.
Here on the Iberian peninsula, they say the Portuguese speak English much better than the Spanish because they don't dub their programming. Spain dubs everything and the population is generally stuck at a pre-intermediate level in spite of beginning classes very early and continuing for years and years in school.... something obviously is not working!
My kids switch languages around a lot in their viewing but will also willingly watch some cool things in languages they don't understand- animation shorts, The Red Balloon, White Mane are things that come to mind. I would try and find cool stuff that's only available in the target language or a web game or something. I would also bring in music in the target language for the car, etc. We also always have subtitles going... I'm addicted, even in my own language!
If you're looking for Spanish, Pocoyo's not bad for a 3 year old and easy to follow and maybe some Barrio Sesamo.... each country produces it's own show, so while the characters are sort of consistent, the stories and personalities differ from country to country.