Toddlers like wordless or nearly wordless books, and can read the illustrations. They also like predictable, repetitive books with catchy phrases that allow them to join in. Toddlers begin to learn that reading is not only fun, but is also informative. Numbers, letters, and colors are good concepts to introduce at this age. Don't worry about reading every word.
Toddlers like to talk about the pictures.
As your child grows, you can start talking about what is happening in the story. The older toddler can make the connection between the actions on different pages.