Retelling is a way for students to practice story structure from books they have heard. Many of our young kiddos haven’t reached the point where they can read the actual words of books they love, but they CAN keep the story in their heads. They can practice the story vocabulary, fluency (reading like the author would), and story sequence. When our younger readers practice this strategy, they build their comprehension skills, and can begin to make predictions and inferences with new books. I think it also leads into the strategy of recognizing literary elements, and even comparing and contracting between texts. The more kids talk about books, the more language they build to do this.
I had a student who made this point so well to me. I had read “Click, Clack Moo, Cows that Type” early in the year to my first graders. I left it our in our class library, and every time she had an opportunity, she chose that book, and retold it to whoever would listen. Little by little she would notice words she had read in other books, and began to read the text. By November, the book was “hers” and she had used that experience to teach herself the strategy :).