It is very simple to teach a young GSD that children and small animals are part of the family, or pack. Consistent rules, along with love and affection is all that's needed. With an older German Shepherd, it is a little more complicated but certainly doable.
I've posted a short video of Mystique to show how wonderful Guardian Angel Shepherds are. Mystique is approximately 18 months old. She had the unfortunate circumstance of being born shortly after I got sick. I was unable to leave the couch, let alone socialize her as I normally would. She has seen my Grandchildren occasionally, from a distance, but never up close and personal. Until a few days ago. Here is how she reacted to the strange noises and movements a 3 year old can make.
I'm so proud of her. She followed him everywhere. When he ran, she followed, but did not chase. When he screamed in delight, she looked at him quizzically. When he hugged her, she stood like a trooper. I'm proud of her, and all my dogs.