See this sad, sad pillow. For my 5th birthday my mom's friend made this for me (well, her daughter gave it to me.)
Start by drawing, finding a tooth shape graphic, something for a pattern of sorts. I traced the old one I had and then tried to make it more tooth shaped. This is what I finally came up with. Cut 2.
Cut a square/rectangle of felt. I used two kinds of ribbon, blue gingham and then polka-dot ric rack - trying to make it cute for boys and girls. Cut both ribbons about 1" long than the felt. I actually glued the ric rack onto the other ribbon, tucking the ends under. Then I stitched the two ribbons along the top and bottom of the ribbon onto the felt, again tucking the ends under. Stitch the felt onto the white fabric along three sides, gotta leave an opening for that tooth.
Then pin the two "teeth" together, right sides together. Stitch around the whole thing, leaving about a 2" opening. Clip around the corners, this will help it lay better when you turn it right-side out. (2nd picture on bottom.) Turn it right-side out and stuff it. Then hand-stitch your opening closed. That's it, you have a suitable place for leaving teeth and a safe spot to receive your money (or whatever the tooth fairy brings to your house.)
I got mine done not a moment too, soon. Jon lost his top tooth the next day. How cute is he?!