I have an art studio and this winter my students made felting products. We glued hats to some. So pretty! And so small! As for the size, think about the size of the finger puppet. Top hats made of durable plastic, felt Christmas hats and hats! Oh the hats are the cutest - some kind of stretchy nylon jersey. Hats come in different colors. It was a really good choice. Here are some examples my class made using hats as decorations.
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