After reading the story to your preschoolers, have them name different parts of a dragon's body. This can include claws, wings, mouth and tail. Have students stand up and use their whole body to create each of those body parts of the dragon. Then have the entire class make a single dragon with children being different parts of the dragon. Depending on your class size, you can have multiple children being each wing, claw and body part. Practice moving around the room and, if you're ambitious, act out the story with the teacher playing the part of the knight.
Divide students into two or three groups. Assign each group a word that occurs frequently in "Saint George and the Dragon." The words "dragon" and "George" are two obvious ones. Tell them that you're going to read them a book and every time they hear their word, they have to stand up quickly and quietly. They then have to sit back down immediately. This activity can help build listening skills while letting children move during reading time.
After reading the story once, tell your preschoolers that you're going to read the story again. However, this time they are going to provide sound effects for each page. After you read a sentence or a page, point at them and let them make whatever sound effects they think are appropriate. This might include the roar of the fire when the dragon breathes it, the cheering of the peasants or the swift wind noise of a sword slashing.
When you read the story the first time, don't show your preschoolers the pictures. Instead, give them each art time at an easel and ask them to use watercolors to create a picture to go with the story. It can be as simple as a streak of colors representing the dragon and another representing the knight. Let each child present her picture to the rest of the class and explain what part of the story it illustrates. Put the pictures in chronological order and hang them on the wall. Then let children see the award-winning watercolors in the book the next time you read the story.