First, I have to apologize to the person where I found this. I looked and looked and looked but could not find the original tutorial so I decided I'd better do one while I still remembered how. This is pretty simple. Start with two circles approximately 8" in diameter and sew them right sides together, leaving about 2" open for turning. After turning right side out, press and slip stitch the opening together.
Next, fold two sides towards center. You should have the color you want to be predominant on the inside of the fold. Tack the sides together.
Step 3 - fold the other two sides towards the center and tack them together.
Step 4 - Start turning out the "ears"
Step 5 - Sew a button in the center to cover your stitches and attach a loop to the back for hanging. I cut a thin strip of felt for mine. (last photo)