Im hoping someone might be able to help me remember the name of this animated family movie.

I was very young when I saw this so all I can remember is puppet like people with big blue eyes and really tall animals on stilts, they were elephant like.

Are you perhaps thinking of The Dark Crystal?

The Dark Crystal (1982) (http://amazon.imdb.com/title/tt0083791/)

The creatures describe remind me of the landstriders:

YouTube - The Dark Crystal - Landstriders (http://www.youtube.com/watch?v=-DBkjvXHgj4)