Get a modular bookshelf with multiple separate sections or a number of small book cases. It will be easier for the kids to find particular children's books in separate compartments or shelves than in a big, monolithic bookcase.
Come up with a list of topics for your preschool books. Organize them by categories such as "animal books," "first day of school books," "books about family" and other categories that preschoolers will find interesting.
Create a label with a picture and description for each category of preschool books and tape it above the shelf with those books. Your animal books, for example, could have a picture of a group of animals with the words "animal books" beneath the picture. Prepare the signs yourself or have your preschool kids draw them as you prefer.
Organize the children's books into reader and non-reader within the section. Non-reader books are easy ones for preschoolers who can't read without assistance yet, while readers provide more challenge for students at a higher level.
Show your students where the different children's books are so that they know their way around the library. With the aid of your pictures, even the non-readers should be able to find their favorite books with a little help.
Add categories such as favorite authors or favorite books as the year progresses. If your class particularly likes Tommy Di Paola or Dr. Seuss, for example, you may wish to create sections for those authors. Alternately, you can create a section where your students can put their favorite books.
Make special sections for special projects that come up. If your students do a project about winter during the season, for example, assemble a section of winter books.