If your lo sleeps on their side or back on the pillow, should be fine. If you have a tummy-sleeper they should not be sleeping on a pillow as stomach-sleeping on a pillow is very bad for the neck.
If they want a pillow, that's fine, but there is no actual need for toddlers to have one. My DD was a tummy-sleeper so actually didn't have a pillow until she was 4yo!