You could prompt him / her to take some action (if you think that it is a word he / she is likely to be able to solve).
“Go back to the beginning of the sentence and get ready to start that word”.
The racing car went in the muddy puddle and made a big s_____.
(Say the 1st letter with him/her if necessary.)
“Can you say more?”
“Try it all again.”
The racing car went in the muddy puddle and made a big sp____.
This may be enough information for your child to work out that the word is splash. If not, you could do some more prompting.
“Say it slowly like you do when you write”.
sp-l-ash, spl-ash (or any other variation trialled by the reader).
The racing car went in the muddy puddle and made a big splash.
“Does that sound right?”
“Does it look right?”
In this example the child is asked to reread to regather the meaning and structure of the sentence and to accumulate the parts of the word by starting with the 1st part and adding more. Encourage your child to say chunks (spl-ash) rather than letter by letter (s-p-l-a-s-h) as this is what efficient readers do. The aim is to have the child take some action rather than waiting to be told the unknown word.