I would try: Mini wooden letters, use the exact same idea, maybe add some cotton balls & felt for texture, hot glue a mini Santa hat on some of the more "edge-ier" letters, and use a satin or silk ribbon to hang up for decorating ;)
Pupazzo di neve con tappi di bottiglia
Springtime Mickey Bark
Renna con le manine
Cute Christmas craft
Christmas Crafts for Kids
Beautiful idea for this Christmas! I think I did this in third grade!!!