In the following YouTube video, a teacher trained in Montessori methods gives an overview of how to teach the letter sounds to very young children. The most useful part of the video for me was at the 2:40 point in the video where the teacher shared a kinesthetic game centered around the letter sounds. Basically, to play the game, the teacher has the child trace a letter on a card and say the sound it makes out loud. Then, she sends the child off to place the card in another room where it can be retrieved later. She'll repeat this for each of the letters in a short word. Then, one at a time, she asks the child to bring the cards back by asking for each card by the sound of the letter on it. When the child brings the correct cards back, she knows the letter sounds are starting to sink in.
I've been playing this with my 2-year-old using homemade felt phoneme cards. Our game works like the one in the video, but we go beyond the alphabet and do phoneme cards for SH, TH, NG, etc per the list of primary graphic symbols for each phoneme in my phoneme chart here. My daughter has a lot of fun with it!