Even you have to do a lot of this activity for a toddler, they have so much fun with the materials.
Let them hold the balls - all toddlers seem to love balls. Don't worry if they dig their fingers in a little, as that's only part of the fun for them, they also get to learn about texture.
After playing with the balls, wave around some cheese cloth and make a ghost noise. They will probably think you are so funny. Then tell them that ghosts hide under the cloth and show them that the ball goes under the cloth and that the cloth goes over the ball. Emphasize "under" and "over" for a fun learning opportunity, and then ask them if they'd like to try to put the cloth over the ball. You can see here, that my little toddler was deep in thought about these concepts and also having a ton of fun waving the cloth and ball around and making ghost noises.
Talk about little bit move about over and under and then ask him if he's ready to move on and give the ghosts a tie and eyes and a mouth. He'll be excited for anything new. I used black pipe cleaners for the tie, but you can use any string or ribbon as well. And I used black felt for the eyes and mouth, but again, you can use black paper, fabric, anything you might have.
Your toddler can help place the eyes and mouth, and then you can hang them up and admire them.
My toddler was still engaged at this point, and since we had all of the materials out, I asked him if he's like to make a hat. (He's obsessed with hats, since he and his dad where them all of the time, so he was willing to do another step.) I had to make the hat and explain what I was doing the whole time, while telling him that mommy has to do this point. I enticed him to be patient by saying "here comes the hat" a lot.
I put glue on the hat and let him place it on a ghost's head. And he made another one for one of the other ghosts.
Be as creative as you want. This isn't necessarily just for toddlers. I had a couple roses in my craft box and put them on the hats too to make them even more festive.
And finally, we hung them in the window, and the little guys talked about ghosts for weeks!