If you have a picture of just the two of them together, get it blown up to 8x10 size and let her pick out a frame for it to hang in her room.
Be prepared to answer questions on down the road too. My daughter was 3 when her grandfather passed and they were really close, she just loved him so much. She got a little upset when we told her, and for a while would ask where he was when we'd go to MIL's house. We just had to keep reminding her. About a year later, she would ask more about what happened. Just answer her questions when she asks them.
Don't mention anything about her being sick or just going to sleep, that could make your daughter really afraid of falling asleep or getting sick herself.
When your daughter brings her up, share good stories, good times they had together and just talk about it.
It's hard, but kids seem to take it better than adults. Good luck.
at 9:26 AM on Jul. 22, 2010