To sign hand, simply hold up both flat hands with fingers stuck together and palms facing in. Then use your dominant hand's fingertips to motion up a few inches away from the back of your non-dominant hand, from wrist level to just past your fingertips. You are simply indicating your hand to the person you are speaking to.
Teach your toddler the hand sign in context: when you are teaching the body parts to your toddler in general, or when you are instructing them to insert their hands into a pair of gloves or mittens, or through the sleeves of their blouse, dress, or jacket.
Teach your toddler this sign along with the other body parts when they are ready. It is good to complement the body parts flash cards with nursery rhymes, like "Head, Shoulders, Knees and Toes".