A: Your child's teacher offered you an excellent suggestion that will make letter recognition more fun. That's important, because these key pre-reading skills take time and practice, and your little boy is more apt to stay with them if he enjoys the process.
Here are some other things -- low-cost or no-cost -- you can try:
Stock up on Alpha-Bits cereal and make breakfast (or snack time) an impromptu learning experience for your son several times a week. He can pick out letters he already knows and maybe even spell some simple words for you. You can also use the time to practice letter sounds: as he picks out letters to munch on, ask him to tell you the name of each letter and the sound it makes. As the weather turns cooler, use the same strategies with alphabet soup.
Be sure to begin working with your child on letters he already knows, such as the first couple of letters in his name. Once he's mastered recognizing those, move on to new letters. Don't forget to review letters already mastered -- but do it in interesting and fun ways (for instance, keep track with letter magnets on the fridge, or cut out letters he knows and put them on a wall or bulletin board).
There are also a lot of fun, interactive Web sites that offer games and activities to help preschoolers learn about letters.
Reading alphabet books together is a good way to learn letter names and also letter/sound correspondence.
Reading rhyming books helps with phonological awareness skills -- knowing the sounds letters make. That's been shown to be an indicator of whether a child will be a successful reader.
Reading with your son, every single day, is the single most important thing you can do to promote the early literacy skills that will prepare him for successful learning.
Another thing you can do every day: Show him by example how important reading and writing are -- as you write the grocery list, a birthday card or note, or anything else familiar to him.