Probably my favourite creative toy of all is the puppet. My puppet collection ranges from big muppets to tiny finger puppets. I believe they are incredibly powerful because they often allow kids to articulate thoughts and feelings otherwise suppressed. They're also wonderful for linking literature with storytelling.
Kids don't need to use puppets formally by putting on a little play with a puppet theatre and audience, though that can be an exciting project for a rainy weekend. Puppets can be used just like dolls or action figures in children's imaginative play. I like to use them myself sometimes in a storytelling or read aloud session, because they're a great way to get kids to respond or join in. Sometimes, a puppet can lead children into a book and that is truly a wonderful thing.