You will need some of the special Christmassy yarn (solid colour plus glitter) that appears at this time of year. It comes in red, blue, white, green and a few mixes of colours. The teddy is knitted in two halves - back and front, and is knitted in garter stitch throughout.
You will also need a pair of Number 3 mm knitting needles, straight or circular. Cast on 5 stitches for the first leg.
First row, increase one stitch knitwise into every stitch. You will now have 10 stitches on the needle.
Step 1: The Legs
Each leg is knitted separately.
With the 10 stitches that you have on your needle, knit 20 rows. With these 20 rows on your needle break of the yarn, leave these stitches on the left hand needle and cast on 5 stitches for the second leg.
Second leg - Increase one stitch knitwise into every stitch (10 stitches) and knit 20 rows.
Step 2: Two Legs Together
Knit across the 10 stitches on the right hand needle and the 10 stitches on the left hand needle to join for the body. Knit 10 rows garter stitch.
Step 3: Arms Are Easy
After you have knitted the 10 rows increase 5 stitches at the beginning of the next two rows, so that you now have 30 stitches on your needle.
Knit 7 rows for the arms, (don't forget you are using garter stitch throughout)
Cast off 5 stitches at each end of the next two rows. Break off yarn.
Next row rejoin yarn to the 20 stitches left on the needle and knit 7 rows for the head.
Cast on 3 stitches at the beginning of next 2 rows for the ears.
Knit 3 more rows and bind/cast off.
Step 4: Two Identical Body Pieces Are Needed.
You have now completed one side of the body. Knit an identical piece in the same way.
When you have the two pieces, take them both and sew them neatly together leaving a small hole at the top of the head for stuffing. As this is garter stitch throughout there is no wrong or right side, just make sure that you darn in any loose ends so that they do not show.
Step 5: Fibre Fill Him!
After sewing, turn the tiny Teddy right side out, and stuff. Make sure you push stuffing into the ears. I always use hypo allergenic fibre fill which is obtainable at your local craft store. Sew up the hole in the head very neatly. Embroider two eyes and a mouth in black yarn.
Step 6: You Now Have a Tiny Teddy Tree Trim!
To finish, gather round the ears very neatly to form a better shape and tie a decorative bow tightly around his neck. Attach a loop of yarn to the top of his head, and he is now ready to hang on your Christmas tree, or anywhere else that takes your fancy.