Here's my post in Arts & Crafts
. If you have any thoughts on something super-simple my 6yo DD could make for her 6month old cousin I'd appreciate it.
If you have some wool felt, you can cut it out and have her sew it (I'd use a tapestry needle) together - shape of your choice - a star, teddy bear, heart, stocking, etc. Stuff it w/whatever you have on hand! Different texture/feel with different stuff.
My 5 and 7 year olds made felted balls for their little brother. You can find directions on the Martha Stewart website. It's easy, can be done in maybe a half hour, and the result is a nice, usable baby toy.