You need to be familiar with the first Gruffalo book before you read this. We - parents and three-year old boy - really like it! The description of the "Big Bad Mouse" ("is terribly strong, and his scaly tail is terribly long, his eyes are like pools of terrible fire, and his terrible whiskers are tougher than wire") is scary enough to appeal to boys. There's a mystery element to the story because the Child follows tracks ("aha! oho! a track in the snow!") and has to figure out if the animals he meets (which are the same as in the first Gruffalo book - snake, owl, fox) are the Big Bad Mouse. My son went on about the Big Bad Mouse for weeks after getting this book. The illustrator's done a fantastic job again, the Child is really sweet.
We have the audio version of this story, as well, and I would recommend it highly. It has great sound effects (footsteps in the snow, dramatic appearance of the Big Bad Mouse etc) and it's great fun to listen to - over and over again. We're not bored of it yet!