Get some magnetic letters or bath letters. Have your child stick them up so he can see them all. Start by you, the parent, posting a word on the fridge:
Have your child sound out the word or read it. (Make the word fit your child's ability...you could even just do letters).
1. Tell your child to change the word cat to....bat, mat, sat, etc. A sequence of words might be : cat, sat, mat, map, cap, lap, tap, top, etc....
2. Or let your child build a word and challenge you to read it. Then go back and forth taking turns building and reading. When I do this Charley I usually build off his word to make a word that rhymes his by just changing a letter.
* Please note that I do these things with Charley because he LOVES it. He begs to play school and enjoys sitting and doing things like this. If he didn't I WOULD NOT force it or shove this down his throat.