They do make toddler pillows that are smaller and not as fluffy.
Personally, I wouldn't give a toddler an old pillow, as they are notorious for being polluted with dust mites and allergens, etc. I say this because I have a little boy with lots of allergies. I know, pillows can be washed, but still. I'd get him his own toddler pillow if you feel that he's more comfortable with a pillow. :)
Just read the previous post, and although I didn't mention it, Ikea is where we got our toddler pillow, too. They are in the infant/crib/gear area... It really is the perfect size for a little one, not too big, and not too fluffy. Just right, like the little bear's... lol