My son is a train fanatic, and he will read almost anything about trains. However, as the parent who has to read stories over and over and over again, I am a bit more discriminating.
One series of books that I can happily read to the children is the Usborne Farmyard Tales train books. They are by Heather Amery, with adorable pictures by Stephen Cartwright. The books we own are "The Old Steam Train," "Rusty's Train Ride," and "Dolly and the Train." There is another called "Woolly Stops the Train" which I don't believe we have (but there are so many books in this house, who really knows?)
There is not a lot of plot in these 16-page picture books. For example: kids go on a field trip; the steam engine stops working; Dolly the horse pulls the carriage back to the station. However, the illustrations are not only cute, but there is a little yellow duck on each page for young readers to discover. A map of the countryside is on the endpapers so you can locate the events of each story, and there is a duck on the map too.
These are sweet, simple books for young children. I would recommend them for ages 2-6. There are other stories that don't involve trains, but we have not read any of them. They are probably equally cute and entertaining for children.