Hearing individual sounds in words is called phonemic awareness. A child with phonemic awareness has the first skill needed to learn to read. You can help develop phonemic awareness by playing games and separating sounds in words.
Here are some free online reading games for kids to develop phonemic awareness:
Fuzzy Lion Ears
I hope these games help your child start to hear individual sounds in words. Soon your child will be ready to read and sounding out words using phonics rules and letter to sound associations.