I have a few favorites from my childhood:
Santa clothespin: paint wooden clothespins (squeeze type) red, leaving a small part about 3/4" from the top unpainted to use for Santa's face. Glue white felt cutout pieces for hat (pompom and brim), beard, and trim on Santa's jacket. Draw face with black felt-tip pen, mouth with red, and clip on the branch.
Bells: Use 4 or 5 clean plastic creamer containers (the small ones you get at Dunkin Donuts or wherever). poke holes in the top to pull rickrack through, tie all bells together as a bunch. The creamers can be colored with ordinary crayons, so this is an easy and fun one for very small kids.
Life Saver men: thread a doubled-up strand of yarn through the Life Savers, with the looped end at the bottom. Use a needle to thread the strands through a small styrofoam ball to be used as the head. The yarn can then be looped at the top for hanging. Cut two bunches of yarn for the arms and legs, about 15-20 strands for each depending on how thick you want the arms and legs. thread the arms through the yarn between the head and body, then tie at the neck and at the wrists with other small pieces of yarn. Thread the legs through the loop at the bottom of the body and tie at the ankles. Use sequins and other decorations to make the face, adding hair, hat, whatever as you like.
I also used to make pinecone reindeer with small pinecones, using googly eyes and pipe cleaners or just twigs for antlers. You can use felt to make little scarves.