As part of the agreement, Alligator Books will create a line of creative play products including Sticker Pads, Sticker Paradise, Sticker Boxes, Sticker Fun and Magnets.
The range will target UK retail and the mass market when it launches in spring 2011.
With 29 UK licensees on board, a successful DVD launch selling over 10,000 units in the first week and a BAFTA win for best pre-school animation secured, Ben and Holly’s Little Kingdom has become a key licence in the pre-school market.
Neil Rodol, commercial director, Alligator Books, said: "We have enjoyed an extremely successful relationship with Entertainment One on Peppa Pig, which is one of our consistently best-selling pre-school brands and we are confident that Ben and Holly’s Little Kingdom will prove to be just as popular and another great addition to our licensed portfolio."
Hannah Mungo, licensing manager at Entertainment One, added: "We are pleased to be teaming up with Alligator Books once again to create this great line and we look forward to seeing their products in store."