Ha - I think I've read about this every year for last last 5 - my daughter is 6. Yes it's normal, some do it more than others, some do it more when they're feeling a need for "comfort", some are just more sensitive, more into sensation, etc. All the advice - don't make a big deal about it, don't make it shameful or dirty, talk about how private parts are private, etc. For my own peace of mind, I just took to equating it with "picking" or "fussing". My usual conversation is, "No one likes to see you pick - no one wants to see people pick their nose, pick their butt, sticking their fingers in their ears or their hands in their pants... these are all things people don't want to watch other people do. If it's your nose, get a tissue, if it's your butt or pee-pee, go to the bathroom or your bedroom if we're home, if it's your ear, at least be quick about it and don't sit and examine anything sticking to your finger." I figured if I just lumped it all together then I could address it without embarrassing her or myself and since it's all true - yay! Since your little girl is still so young, obviously, you're limited on what you can say, but at least you can consider whether this approach works for you or not since I didn't come across it in all my research. Everything I read was situation-specific.
Good luck!