Zog,
I would echo what a lot of people have said about not rushing into it. One of the main considerations is how physically demanding it is (when played correctly), and so it's not just about length of arms and so on, but ability to breath well, use your diaphragm effectively and just sheer stamina. Starting early is possible, but not necessarily recommended, because if she isn't physically quite ready she will develop bad habits in order to circumvent her weaknesses.
Playing the recorder will teach her
a) to read music
b) to coordinate what she's reading with what her fingers are doing
c) to breath properly
d) posture
e) tongueing
f) musicality
Plus a recorder is much cheaper, so if she goes off it, you haven't forked out a fortune.
Piccolos shouldn't be played until flute has been mastered, IMO.
Start flute around 11 years old.
BTW, I am a qualified flute teacher, for what it's worth. I'm not saying the above is gospel, it just reflects what I've found to be the case.
Good luck.