I'm just starting to help my dd with this now. She is 4 and in reception.
For 2 mins each night (I use a kitchen timer to make sure I don't do it for longer) we practise blending. I have a list of cv (consonant vowel) words (e.g. up, in, on, at etc) and CVC words (e.g. cup, bit, fat, lad etc).
I choose one of the CV words and I model how to blend the sounds together E.g. "u - p, up".
Then I get my dd to repeat "u - p, up" after me.
Then I get her to say "u - p, up" by herself.
Then I choose another couple of CV words and repeat the same process. While I say each individual sound I point to two fingers which I am holding apart. When I blend the sounds together I bring my fingers together to show that I am making one word. Initially my dd found blending CV words quite tricky, but after a few days she got the hang of it.
We have now moved on to blending some CVC words in addition to a few CV words. We follow the same process:
Me "c-u-p, cup"
Me and DD "c-u-p, cup"
DD "c-u-p, cup"
As dd is getting more confident, I sometimes miss out some of the stages and let her have a go all by herself.
Once she is able to consistently blend CVC words I'm going to add a few CVCC words (e.g. send) and CCVC words (e.g. plan).
I have been amazed how quickly my dd has got the hang of blending by using this approach. It sounds labour intensive but it really isn't. You can make it a short, fun session and if you do it in the way I've described above your dd shouldn't get frustrated because there is limited opportunity for her to get it wrong.
You can use this approach to help her blend phonetically regular words when you look at books together. E.g. if you are sharing a book which reads "The dog sat in the room", you could say something like, "Oh, here's a word we can try to blend. Let's do it together d-o-g, dog" etc.
Also, and I'm sure you're already aware of this, double check that you are not encouraging her to sound out words that are not phonetically regular e.g the, there, sight etc.