The dress is knitted from the top down.

In order for the dress to fit the teddy best as possible, you need to make sure that your knitting tension is correct. If you have more loops on 10cm. section, you need larger needles. And if you have fewer stitches per 10cm. do you need smaller the needles.

I personally find it most comfortable to knit small garments on a long circular needle and use the Magic loop technique after the piece is joined in a circle.
If you also want to use double pointed needles, that’s fine.

I also encourage you to use the yarn you have at home because the dress is an ideal leftover project.