I found the most precious book the other day while shopping in town. It's titled Little Visits with God by Allan Hart Jahsmann. It is beautifully written and has my little children begging each night to read a story. My older children have even sat in a time or two and listened with littles. Very highly recommended!!
Here is a review from Amazon:
"This is a wonderful tool for parents who are trying to find a way to reach their children during family devotions. Each story begins with a theme Bible verse, and then presents a story involving children and their parents related to the Bible passage. Afterward, there is a series of questions so that you can discuss the story with your children. For older children there is an extended Bible reading listed. Finally there is a concluding prayer.Not only will this help involve your children in family devotions, but the questions also help to develop listening skills. These benefits flow into church on Sunday morning. I highly recommend this book for anyone trying to involve their children in family devotions. "