I introduce it - just a little - fairly early on. All the pupils, large and small, are thrilled to be able to use it, and as long as the little ones are tall enough to keep their heel on the floor while perching on the edge of the music stool, there's no problem.
I tend to use it first in some of the Dozen a Day exercises - like the Cartwheels ones, which being arpeggios are ideal for first pedalling attempts and always sound nice - before using it in pieces.
One piece that springs to mind as an excellent one for relative beginners to use the pedal in is 'Wind in the Chimney' by Joan Last (in the book 'Roof Tops'). It's a lovely piece which you can put a lot into in terms of dynamics and shading, and the use of the pedal makes them feel really 'professional'!