K.C.
Agree with others who said get there early and take a break in the afternoon. It is busiest from about 12:00 - 4:00, so that's when you'll have the longest waits. Early morning you'll get on rides quickly and fantasyland (where all the little kids rides are) starts getting empty again in the later afternoon. Maybe ride all morning, have lunch in the park, and then take a break for a couple of hours. OR, head over to CA Adventure for the afternoon, where lines are always much shorter.
Your two year old is definitely not too young to have a good time. Several friends and I had season passes all last year when our kids were two and they loved it!
In Fantasyland, the longest lines are typically at Peter Pan, Dumbo, and Alice in Wonderland. Ride this early to avoid waits. Rides like Pinocchio and Winnie the Pooh never have long lines. Autopia gets busier by mid-morning and the submarines (aka Nemo) is almost always crowded. Lines are usually fairly short at Small World. Your two year old might be too short for Autopia but can ride everything else I just mentioned. Some of the other great rides for little kids not in Fantasyland are Haunted Mansion & Pirates of the Caribbean (which may both scare the two year old), and the Jungle Cruise.
The Toy Story ride at CA Adventure is REALLY fun and always ridiculously crowded. If you want to do it, be there when the gates open and make a dash to that ride first thing.
Good thing in June in So Cal is that it often is NOT, as we tend to have a lot of overcast days.
Oh, and there is a small petting zoo behind Big Thunder Mountain if the kids are into that. : )
K.
http://www.discoverytoyslink.com/karenchao - got kids? I've got toys! Great products for travel and for the holidays.