Hi there
I reluctantly got a night light for our DD at about the same age - she had also been used to sleeping in the complete dark, but started asking for a little light. I know that I have read that nightlights can potentially be damaging to eye sight, so you might want to do some research first.
That said, a nightlight did make a big difference to our daughter when she woke in the night - she was not frightened or anything (no crying). I think at age 2 or thereabouts, our kids' imaginations take off massively and thus also their potential fears.
Does someone else look after your LO at any time or does he go to daycare at all? I am reckoning he must have heard the three little piggies story from somewhere....
Hope you get things sorted out for your LO soon. (hugs) x