I would not recommend it for a 3yo. Even a four year old would have trouble understanding the story line and for a 3yo would go over head! Can you see Madagascar 3 instead? I had doubts for my 10yo to see it until I saw the reviews. It is rated PG and does have scary scenes.
My 4 year old and 6 year old were fine in it, but it does have what they call the bogey man (pitch black). So for a sensitive child it could be quite scary with the dreams being turned to nightmares with scary horses and so on.
Issues around children learning to read are rarely out of the news. Which is hardly surprising – becoming a successful reader is of paramount importance in improving a child's life chances. Nor is it surprising that reading creates a virtuous circle: the more you read the better you become. But what may come as a surprise is that reading to dogs is gaining popularity as a way of addressing concerns about children's reading.