A.B.
This same thing started happening with my daughter when she was that age. At the time, she had a stuffed elephant and it was actually her Nanny that came up with this great idea. We had a 'ritual', where we put the stuffed animal on the floor, circled around it 3 times, and then kissed it five times, thus giving it "magic", and making it capable of keeping bad dreams away. It worked.
When my daughter was 5, I began having horrible nightmares (I was in graduate school), and so my daughter passed it along to me. She said she felt that I needed it more.
My daughter is 13 now, and I still sleep with the 'magic' elephant. I never have nightmares. :)
I H. this was helpful...
~A.