I used the exact same technique for these tiny tooth fairy pillows that I use for my envelope pillowcases, cut way, waaaaaaay down:
The big fun, however, came in personalizing them! I replaced Will's old tooth fairy pocket, too, so that the girls could match, and for hers I used the same tooth fairy stencil that I used for the original pocket (although I should have replicated the monogram, too--I LOVED how it turned out that first time!):
For Syd's tooth fairy pocket, however, which I made just as her very first loose tooth was getting pretty darn loose, I had Matt draw a diagram of the primary teeth (using a diagram from Google Images as a model), then when Syd finally lost that tooth, I let her color it on the diagram and I wrote in the date:
Neither kid has ever been interested in having the Tooth Fairy take her teeth, and the pockets are also a good place to simply keep those shed teeth between visits. The Tooth Fairy does, of COURSE, take the letters that the children write to her. She gives them back to me later, though, because she knows that I'm making a collection of the children's correspondence with all fairies and Santa and imaginary beings.
Because Syd often writes to unicorns and asks them to send her candy. I don't really know why. They never do. But they do write back with silly messages, so that's fun, too.