Choosing the right fabric for the size of bear you are making is vital. The right fabric choice not only makes the end result more pleasing but makes the process of creating the bear a more enjoyable experience.
Teddy Bear Fabrics - General guide to choosing the right fabric for your new project.
As a general guide, for a bear up to 8cm or 10cm (3 inches) the best choice is an upholstery velvet type fabric, You want a fabric that does not fray and has a little stretch to make turning your tiny sewn pattern pieces as stress free as possible.
For a bear of around 11cm to 25cm (5 to 10 inches) then the perfect choice is mohair with a short to medium pile length (between 3.5mm and 10mm). It is possible to get away with using slightly longer pile lengths, say up to 15mm if the pile is "crushed".
For bears larger than this, then you can choose virtually any mohair fabric that you desire and there is a huge variety of styles, pile lengths and colours to choose from on the internet.