There are so many reasons to include puppets in your classroom, ranging from pedagogical to pure fun!
Puppets can create a strong visual memory for students, allowing them to tap into concepts they have learned long ago with a surprising amount of retention. If you have a puppet responsible for a specific musical concept, such as dynamics or types of articulation then each time you bring out that puppet, students immediately know what musical category their learning is going to fall into. This can be great for long-range planning and revision of older concepts.
Puppets give you a break from teaching! (Well, not really, but for the kids it can feel like a fresh start). If you feel students' attention starting to flag, pulling out a puppet can be a great way to bring back their focus. One of the biggest learning moments of my Kodaly training was the importance of mixing up your activities and transitioning smoothly between them to allow even Foundation students to focus for 50 minutes at a time. Puppets are an excellent way to do that. Even if they've been sitting in front of the board for five minutes, students will happily sit for five more in complete and enraptured silence if their favourite puppet is brought out at the right time.
Puppets allow shy students to come out of their shell. When doing solo singing activities, it can be tough for students who aren't very outgoing or who are self-conscious of their voice - just think of all those people in the class watching and judging them However, if they are given a puppet to sing to, there is a safety net between them and the rest of the class, allowing them to find the confidence to sing. Another great way to achieve this is to ask them to sing AS the puppet - then it's not their singing we can hear, it's the puppet's!
These are just a few reasons to try puppets in your classroom, but for me the most important reason is the smiles I see for the rest of the lesson whenever one makes an appearance. As Kodaly says, we should be teaching music so that it is a joy for the students and this is one of the best ways I know.