Make reading to your child a regular part of your daily schedule. Read both early readers and chapter books. When reading, point to the words as you say them and read slowly. This will allow your child to read along with you. If you notice that you child understands a certain word, such as the word "the," let her say that word a few times when it appears in the story.
Let your child see you reading. Read often and in front of them so that they see that reading is a part of everyday life. The more frequently he sees you reading, the more likely he will be to want to read.
Teach them the alphabet sounds. You can do this easily by writing the entire alphabet on a piece of paper in front of them, while saying each letter sound along with it. Doing this once a day will really reinforce the letter sounds, and pretty soon your child will know them by heart. Knowing the letter sounds can greatly increase your child's literacy abilities.