Oh, hello, some great suggestions on here! A few more we love are the Trish Cooke books Full of Love and So Much .
Most of the other books I would really recommend are out of print, but you will find them on Amazon or eBay. Mary Ann Hobermann's books are absolutely superb and completely unappreciated - we love A House is a House for Me and The Cozy Book
I second Big Mama Makes the World - matriarchal creation myth
A Lion in the Meadow - mother and son make up stories together with surprising results
Michael Bird Boy - fab heartwarming story about friendship and taking care of the environment (sounds pukey but is marvellous)
and The Bunyip of Berkeley's Creek - about being different and having a positive self-image.
All of these are brilliantly illustrated picture books suitable for roughly age 2 - 5.
Oh and maybe slightly over the head of this age group but soooooo wonderful, is How Tom Beat Captain Najork and His Hired Sportsmen which I promise anyone will enjoy.
For chapter books to read aloud we love Milly Molly Mandy, My Naughty Little Sister, Jamie and Angus stories and The Bullerby Children .
I am very chuffed you are asking me, I hope I haven't overwhelmed you with links.
This is a subject close to my heart so I may come back and add some more later