When I taught instrumental music in public schools, I guided my students to perform a simple 12-bar blues jam. I learned this approach when volunteering and substituting for Randy Porter in Oakland, CA and embellished it in my own classroom and studio.
You, as music teacher, can do this with your students too! Concert C works well as the first key. You can play a recording of "C Jam Blues" to demonstrate a very simple melody and progression. "Bags' Groove" is another good example. Charts for these songs can be found in the Real Book.
Make a simple recording of the chord changes for your students to play solos over for home practice. You can play piano or guitar live in class and/or use a publishing program such as Sibelius or Finale to create your backing tracks. If you're feeling adventurous and have the time, you could multi-track backing tracks on a hard-disk recorder and transfer those to CDs. For example, I've produced the Beginning Improvisation method that includes practice chord progressions included for all 12 keys for blues and dominant 7ths.
The key to making this process fun for young learners is to demonstrate using only three notes to start with. By limiting the number of notes they need to remember, you free them to be creative with their rhythms. Start first with only quarter notes and half notes. Then add in some swinging eighths when they are ready.
The point of this exercise is for you and your students to have fun while they are learning to use the theory (scales) you are teaching them in smaller pieces.
The next steps are to repeat the process adding two more notes (playing with the first five notes of the scale) and then finally using all the notes of the blues scale. You can break it down for each chord in the progression and your more advanced beginning improvisers can change scales with the chord changes. Students who are less comfortable can use the blues scale of the key all the way through the 12-bar sequence.
Over the same Dominant 7th chord changes, you can use the Dominant 7th scales to create jazzy melodies. Using the same method as above, you can demonstrate these sounds for your students and break these scales down into smaller pieces for melodic explorations.
It's really fun for students to create their own melodies. Some may be a little cautious at first if they're used to always reading notes from the page. The ideal class setting would be to introduce improvisation in their earliest stages of learning so that it's not foreign to them and they don't fear doing it wrong or making mistakes. Let them know that as long as they stick to the notes of the correct scale, they're doing a great job!
Improvisation is a great way to involve students in the live creative process. Who knows? Maybe the next Miles Davis or Charlie Parker is in your classroom...