Bob Books worked the best in my house. They have a gradual and effective way of introducing new sounds and combinations while increasing the challenge in a non-intimidating way. I just linked to set one, but there are five sets in all, and I can’t recommend them highly enough!
For level one and two readers, we really enjoyed the Fly Guy books by Tedd Arnold, Tiny Goes Camping and the other Tiny the Dog books by Cari Meister, The Puppy Mudge books by Cynthia Rylant (who is one of my favorite early reader authors). Puppy Mudge is a great gateway to more advanced books in the Henry and Mudge series, also by Cynthia Rylant.