The leveling system that we use at Bel Air is called a 'guided reading' level. It is a system that levels books from easiest to hardest using the letters A-Z.
The goal for all students is to be reading at a level L or M by the end of the school year.
Examples of these kind of books are beginning chapter books (Magic Tree House series, A-Z Mysteries, My Weird School books, Judy Moody, Bailey School House, Cam Jansen, The Littles).
All students should know how to pick GOOD FIT books but a reminder is always a good idea. Books should not be too hard or too easy. The general rule would be no more than 5 errors or words that they don't know the meaning on one page.
One resource for you to use is Scholastic Book Wizard. You can enter the title of a book and it will give you the guided reading level (make sure to click on that choice). It does not have every book but it has a lot.
http://www.scholastic.com/bookwizard/