Your preschoolers are not too young to understand-tell them the truth, but keep it simple. When explaining a complex situation to a young child tell them enough to grasp the big picture, but leave out the details. Follow their lead. If they ask a question, answer it truthfully and simply. If they don't ask a question, let it "marinate" for awhile while they process the information. You can bring up the subject again later, giving them permission to learn more and talk about it at their pace.
Example: Before Mommy met Daddy (Mark) she was with someone else and had a child with him ."John" is his name. John is your big brother's father, but John isn't around.(You don't explain why-just let it sit) That's why your brother calls Mark Daddy. Mark loves your brother and loves being his Daddy just like he loves being your Daddy. Once in a while "John" calls your brother and they have a short talk.
You may want to add: When you get a bit older you can say hello if you
want to.(Get permission from your older child and "John" first before you offer this). This let's the younger children know they are not being punished or excluded from this experience for some reason. They might to want to talk just out of curiousty. I see no harm in it. When something is no longer a mystery, it loses the potential to hurt and bother.
Hope this helps!
Sincerely,
J. Clark, MA Parent Educator
Instructor of Love and Logic Curricula
www.janadaclark.com