We’re just going through this right now. Our daughter just turned 2 days before our son was born two weeks ago.
We have friends in a similar situation, whose children are 20 months apart. They had quite a bit of trouble with the older sister being jealous of the new sister.
Being aware that there would likely be issue, we planned ahead and talked to our friends as well as other people about how to handle it. For example, our friend said that when the baby cried, she would ask the son if it were a good idea to pick her up. That seemed to help him realize why his mother was always holding the baby.
From well before our son was born, we bought several books about young children getting new younger brothers or sisters. We also showed her books about babies, and talked about getting a new baby at lot.
We practiced petting dogs and flowers very gently so she would be used to being soft with certain things.
Obviously, at 2 years, her comprehension isn’t like an older child, but I think talking about it helped.
She was in the delivery room with us with her brother was born. Again, her level of understanding is limited, but it was much better than just bringing a baby back from the hospital.
During the time my wife and the baby were in the hospital, we visited every day we could, and talked a lot about the baby.
She quickly started to say “my younger brother” (in Chinese) and “my baby” or “My Shawn” in English and Japanese.
She really likes him at this stage and likes to hug him. We have to watch that her enthusiasm in keep in check.
I give her lots of attention so that she doesn’t miss out from what she is missing from mommy. She is a little more fussy on some days, and sometimes has wanted me to pick her up too when I’m holding the baby. We were prepared to give her a lot of slack, but she hasn’t needed it that much.
All in all, I think it’s gone really well.