My 3 year old daughter has a small Elephant, that she calls Eddie. He was always in her crib with her, till eventually she got attached to him. Now she ALWAYS sleeps with him, and like previous comments, it signals 'bed time'. He doesnt leave the house, unless we are staying away and generally stays in her room, although if she hurts herself, once we have hugged her tears away she likes to have a cuddle with him.
We even have 2 of them, in case we loose one, and also she takes him to day care to sleep with too :-)
i encourage it and i dont worry about it at all. Makes her very happy and comfortable.
As for my 9 month old, we have put a small monkey in her crib, but she hasnt taken to him yet... not saying it wont happen, but she is more attached to her blanket that she sleeps with as she likes to cuddle up with it, and sometimes put it over her head (dont worry it is one of those cotton blankets with holes in).