Communication is one of the most important skills a child needs to learn, affecting relationship forming, confidence and learning abilities.
I've been reading a little about communication skills and the generally agreed points are:
Talk to your baby/child about what you're doing, describe what you're seeing on walks and bus/car journeys. The more you talk to them, the more they will understand.
Every day have 'chat time'. Turn the TV or radio off so there are no distractions and your words can be heard clearly.
Try to have family meal times at least once a week, discussing the daily events and including the baby/child in the conversation.
Ask open-ended questions and not just yes/no answered ones. This encourages speech and the thought process and boosts confidence levels.
Sing to and with your baby/child. The repetition of the nursery rhymes and songs will increase their vocabulary.
Watch your baby's/child's responses. Look out for sign that they've had enough - closing their eyes, turning their head away or simply saying "no".