i was painfully shy as a small child too, so i know the feeling... but i have no idea how to help him. i grew out of it in the end.
he is fine once he knows a person, but for eg, buying shoes yesterday; lovely smily friendly, but not overly inyourface young lady speaks to him, to ask him to stand up or walk or if he likes the shoes... whatever... and he just literally crumples up and goes floppy in my lap, hiding his face and refusing to speak. the more anyone tries to coax anything out of him (and he likes the shoes so its not that), the more he shuts down.
its not really any big deal. not holding him back developmentally, and he establishes friendship etc at nursery/school... but i do remember feeling trapped by my shyness as a child and wishing i could come out of my corner and enjoy things, but not feeling like i had any way to do that, if that makes sense.
obviously, saying 'dont be silly' etc doesnt help. but neither does the 'howtotalk etc' approach of stating it 'youre feeling really shy arent you?'... he just seems to shut down so quickly, that if i had the right thing and said it fast enough, i reckon i might be able to stop him going completely into his shell...
should i just leave it alone?