As many people asked me to post the instructables along with the video, I have to re-submit this movie. Thanks for watching everyone!
Step 1: Materials Needed
Two towels (one bath towel, one hand towel)
two safety pins
some colored paper for the eyes and tongue
Step 2: The Body
Take the bath towel, lay it down and roll it from both sides till you get at half.
Step 3: The Body - II
After you rolled it from both ends, fold the tubes facing forward as in the picture
Step 4: Folding the Head
Take the hand towel, lay it down and then grab the two lower points and unite them at half...
Step 5: Folding the Head II
Grab the created lower point and fold it over the horizontal line on top sticking a bit underneath
Step 6: Folding the Head III
Now grab the sides and roll them till they meet at the half, making sure that you have two points sticking out
Step 7: Folding the Head IV
Secure the two rolls with a safety pin
Step 8: The Ears
Adjust the two points as they are the ears of the animal
Step 9: Attach the Head to the Body
The head it might stay by itself, but is better to secure it with the second safety pin
Step 10: Add the Eyes, the Nose and the Tongue
Create the eyes, the nose and the tongue as you wish and attach them. You may use some small pieces of scotch tape on the back.