Read the title and look at the pictures. Label pictures that your child cannot name. The talk about or predict what the story is about.
Read 1 page or 1 paragraph, then stop and ask a question about the content. Once child answers, model the correct answer in a short simple sentence.
Continue Step #2 until the story is complete.
Then go back and ask the same questions (reword if possible) and again model the answer.
Another thing you can do is talk about the pictures on each page prior to reading. Help fill in vocabulary gaps by supplying the words. You can ask questions like: What is happening in this picture? What is he wearing? What is he wearing on his neck? Using this technique I discovered my son did not know the word for mittens or scarf. Once you see a vocabulary word that the child does not know, try to use the word over and over again. "Oh look, he is still wearing a scarf." "In this picture, what is he still wearing on his neck?" Then later, use the word in another context. Perhaps go through your closet and find a scarf. "Look, what is this?" Your right, it is a scarf. Do you want to put on the scarf?