Can animals spawn?

If their Minecraft PE is 1.6.1 or later, I am 100 percent sure that your kids will just have to wait a bit. (About a month in Minecraft days) and if there are few enough remaining animals, new ones will spawn. Eventually. Some of the new spawns will be babies. This unfortunately will wear off in time though.

I know this because I spent hours fencing all the animals in my world. No more spawned for about 3 (real) months. My brother joined on multiplayer and immediately proceeded to kill all my sheep. I was very angry. After a while I went outside and was logging, when I actually saw a baby sheep spawn out of nowhere. Then a cow and a pig. Then a baby chicken. Etc. I checked this on every site I could find on this topic. 8 out of ten said the same thing. Good luck!

Unfortunately, your kids would have to start over in a new world in order to get the baby animals.

According to the update changelog on the Minecraft Wiki, baby animals only will spawn in new worlds, in the same fashion as adult animals spawn.

I had a game that was made before I updated, then while I was playing it, I found a cute little baby sheep racing around near my house!