Check out this great link here to watch many beautiful, animated videos on the mythology of India. The videos do not have an embed facility so you have to go to Rajshri site direct to watch them for free. You can also download them for a small charge.
I have no idea whether the videos are specifically targetted to children, but I can tell you they are absolutely great. Most of the animated videos are in English with a couple in Hindi. Just watched a very sweet video on the life of Shiva - check it out at this link or at this You Tube link.
