An annual flu jab for the under fives could reduce some types of infection by up to 70%, a team at the Health Protection Agency reported.
They say immunising children would particularly protect the elderly.
Children are prolific spreaders of infection because they have lower immunity and come into close contact with their families and each other.
The findings prompted calls for a reassessment of government policy.
In the US, flu vaccination is already offered to children aged from six months to five years.
But in 2006, after reviewing the evidence available at the time, the Joint Committee on Vaccination and Immunisation (JCVI) decided not to recommend a similar programme in the UK.
The elderly and people with high-risk conditions, such as asthma, are offered a flu vaccine every year.
The latest study estimated the effects of vaccination in the under-twos, under-fives and under-16s on two types of flu.
It showed that the more children who received vaccination, the greater the protection to the population in general.
A spokesperson for the JCVI said it was keeping the issue under review and was awaiting the outcome of further studies being done on the effects of flu vaccine in children.