Here's the how-to:
I made a simple newspaper template as below and cut out 2 of the large pieces and 4 of the circles.
I sewed two pairs of circles together, leaving a gap for turning. I then zigzagged around all edges of the two large pieces. I snipped the edges of the two circles (ears) and turned them inside out.
I cut a piece of freezer paper big enough to accommodate a face for my puppet and ironed it to one of the large pieces. I drew the face. [Note: I used freezer paper because it's difficult to transfer a design onto towel with all those nubblees hanging about.] Now, using a running stitch and embroidery needle and thread, I outlined my design directly through the freezer paper. I then carefully, very very carefully, removed the freezer paper. Finally, I went over the entire outline with a back stitch. Oh yes, and I used satin stitch for the tiny myopic eyes.
To put the puppet together, I placed the circles (ears) onto the face as shown below, and then put the other large piece on top and pinned the layers together. I machine-stitched around the perimeter just inside the zigzagged edge, leaving the bottom open. I stitched one last zigzag around that bottom edge to finish it off neatly. Finally, I flipped the whole thing inside out and...
That Terry... He's hilarious.
The rest of the Old Towel New series: mop pad, washcloths, soft watchband, car sponge, oven mitt.