You should pick soft triquetrous pencils for a small kid. It is sufficient to have a set of six basic colors. When coloring, try pronouncing the name of each color, this helps the baby to remember them.
In the process of painting you focus your attention on a subject that is at your fingertips. If you do it with enough concentration, it will ignore the extraneous noise, unpleasant thoughts and worries. This is a very useful skill that will be useful in situations where you need to briefly forget about your physical or emotional pain.