My mother was a master first grade teacher who taught many children to read successfully, and who guided me with my own children. I would suggest a lot of word games and pointing out words and letters in signs and anything else == like food containers. Rhyming words are great for phonics. I can remember my mother saying Mother Goose rhymes to us from an early age, and also doing tongue twisters like Peter Piper. All of this feeds into reading, and makes it seem natural.
Of course you read aloud and she can follow along in the book. You can point out words that start with the same letter or sound, and even have her pick out words with the same letter at the beginning or words that rhyme.
When you think she is ready, you can start with something on the pre-primer level, such as Cat in the Hat. I remember that after I read my first pre-primer, with all the preparation my mother had given me, without actually teaching me formally to read, I just knew how to read. From then on, I went to the library every week and picked out books and read them. There are a lot of simple picture books with repetitive themes. My favorite was "Millions of Cats," I remember.
Just beware of trying to get a child to sound words out letter by letter. That leads to slow, stumbling reading, which can actually ruin comprehension. You want her to recognize clusters of letters that create sounds and parts of words. That's why rhymes are so important. Play games in the car and while doing the dishes, like "I'm thinking of a word that rhymes with cat. It starts with "r." Or, "how many words can you say that rhyme with "cat?"
S. Toji