Welcome to the Disney Parks Moms Panel Michele ~
Ooooooooooo - that is a tough call because The Plaza Restaurant and Tony's Town Square Restaurant are both excellent choices.
The Plaza Restaurant is very family friendly. We have even seen the Mayor drop in if he is on that end of Main Street U.S.A. and that is always a fun surprise for the kids (this isn't guaranteed and we've only seen him a couple of times). If you get a seat near the window, you can see Cinderella Castle and that is always a beautiful view.
Tony's Town Square Restaurant has a really fun lobby and the kids enjoy watching "Lady and the Tramp" on the TV while they wait. We like to request a table near a window and watch all the Guests coming in to the Magic Kingdom to start their magical day and visiting the characters in Town Square. It is also very convenient to meet Mickey next door in the Town Square Theater (he talks at this location!).
I personally prefer Tony's Town Square Restaurant. The atmosphere is a little more festive. The kids always seem to have a good time there and I feel like they have a little more room to move around. Both accept some dining plans. Before making your final choice, take a look at the menus for both (you can find them on the links above) and see which has foods that your toddlers would enjoy the most (noodles were and still are a hit at my house). If they like the food at both, you really can't go wrong either way.
Reservations can be made 180 days prior to your trip through the links shown above or by calling 407-WDW-DINE.
Please feel free to visit us with any other questions. We are hEAR for you!
Wishing you minnie magical memories :-) Allison V.