Like poems, tongue twisters are a type of wordplay that correlates strongly with success in early reading. The more exposure young children have to fun language games, the better they are able to tune in to language tasks at school. It's no coincidence: activities like this help strengthen children's grasp of oral language, which goes hand in hand with learning to read.
To learn to read and write, children must shift their attention from the meaning of language to the appearance and sounds of individual words. For instance, they will need to notice the sound structure of spoken words: their length, their similarities and differences, and the discreet sounds (called phonemes) that go together for each word.
Tongue twisters help children focus on the beginnings of words and are a good way for them to listen for alliteration, the repetition of consonants in two or more consecutive words. Noting words that begin with the same sound is one of the first steps in building phonological awareness—the ability to pay attention to the individual sounds of speech. In fact, saying "seven selfish shellfish" accurately is a real feat of phonological processing! The tongue twister challenges the speaker to concentrate on the sounds that each word begins and ends with. The two different "s" sounds (/s/ vs. /sh/) require different mouth positions, and it is difficult to go from one to the other. This is what makes it a tongue twister!
Phonological awareness includes a whole range of abilities that have to do with focusing on oral language. Children who are phonologically aware are able to pay attention to the rhythms and rhymes of spoken language; they can treat a word as an object to be played with (taken apart and put back together), in addition to understanding what it means. They notice that some words are short and some are long, with three or four syllables, or beats. They notice that rhyming words have the same ending, and that some words have the same beginnings. Eventually, they will need to listen for each and every sound (phoneme) within a word and to represent that sound with a letter (or letters) of the alphabet.
Typically, phonological awareness begins to emerge well before a child is ready to start exploring written language. The more familiar children are with wordplay and games that spotlight the sounds within words, the more prepared they are to understand the alphabetic principle of English, which is the key to success in early reading and spelling.