Yes a 3 year old child can read some but not a lot.
It's not until age 5 or 6 that a child can read all by themselves easily but you can start teaching your kids to read as early as age 2 years old which is a good thing.
Start by reading them books and then teach them those words and have them try to pronounce the words being read to them.
They may not be able to get the reading down properly but they can start learning and they'll be more ready for preschool or kindergarten if they know some words.
You can get your 2 and 3 year old easy to read books with big letters in them and pictures as that's how I got my 3 year old to read.
He was reading really good by age 5 when he entered kindergarten.