Remembering my 3 year olds - with great difficulty.
The waist level is about the largest circumference - maybe three times the waist measurement of fabric to start with, so it can be folded over and sewn down along the raw edges. You could then have all the pleats he would need.
It would need to be sewn into pleats onto a waistband and then braces put on - maybe buttons to close it - having no hips it would be impossible to belt it onto a typical three year old's shape.
If you made it long enough to cover his head when the lower edge was at knee level or a little below - perhaps with a hem, it would then be possible to take out the hem then move the waist upwards as he grows.
Anne the Pleater