Picture books are excellent for teaching vocabulary, as they have pictures and printed words of items that are familiar and new to children.
Point to pictures in ads and catalogues with your child, and name some items together.
Cherry Pies and Lullabies by Lynn Reiser. I highly recommend reading this book with toddlers and preschoolers, as it has a comforting story pattern. This book is great for vocabulary development. The "ingredients" of the first three activities in this book are illustrated separately from the main illustration.
Adults and children can point to these "ingredients", name each one and discuss how each is used. This story makes an excellent night-time read as it ends with the girl safely tucked in bed.