Teach them nursery rhymes. Start them on board books, asking them to name animals, colors, everything they see. Show pleasure at their knowledge. Jim Trelease's The Read-Aloud Handbook abounds in suggestions of favorite children's books children love. When children are two and older, read them their favorite stories, many many times.
Repetition is vital to learning to read.
Point out individual words to them. Talk to them about the illustrations and the characters. Involve your adult friends in your children's reading. Tell Aunt Sally about it. It's good for them to know that stories are to be enjoyed, shared and talked about.