I have students work with a partner to read the story out loud. One partner reads one paragraph and then they switch. After each paragraph, students discuss what they think happened and also try to figure out some of the blanks on the side (based on their familiarity with the story).
After finishing the story, students are asked to go back and put a lightning bolt symbol over all the Preterite verbs and a wave symbol over all the Imperfect verbs.
Then as a class go back through and discuss why each verb was lightning bolt or wave.
This reading activity can be a nice set-up for students creating their own short stories or fairy tales using the Preterite vs. Impefect (see in my market: "PROJECT: Preterite vs. Imperfect Story).