Here's one my kids liked when they were three to five years old. It was a ghost story told around halloween. Say it softly until you get to the last line, then say that last line in as alarming a fashion as you can muster:
There was a dark, dark forest
And in that dark, dark forest..[pregnant pause]..there was a dark, dark path
And near that dark, dark path...there was a dark, dark house
And in that dark, dark house....there was a dark, dark room
And in that dark, dark room....there was a dark, dark closet
And in that dark, dark closet....there was a dark, dark box
And in that dark, dark box....[extra pregnant pause]...there was
A GHOST!!!!
It's funny and they always liked it. It's good around campfires too.