Hi, I was about 6 to 7 years old before I was able to retract my foreskin part ways.
Between the ages of 8 to 10, I tried to retract the skin more when it eventually gave way and slid past the corona of the glans. For about two weeks after that I experience pain while urinating.
I'm now 44 y/o and do have any problems in regards to my foreskin.
I also have two boys, one biological and one adopted son. My wife and I both decided that there was no need to circumcise the boys.
Our adopted son was not able to retract his foreskin untill the age of 8. Our biological sone was able to do at the age of 3.
I had a younger brother who was circumcised at the age of 9 since he was not able to retract his foreskin at all. I remember that he was not at all happy being circumcised.
There is really no specific age that a boy should be able to retract his foreskin at.
You could get some Penetan cream and make sure that his penis foreskin are moist.
You might also ask your doctor about Cortisoid cream. you could also get your son to try and retract his foreskin while he is the tub with fairly warm water. Your son should be doing this on his own. You can show and tell him what to do. If you force the foreskin back it could create scar tissue on the glans and the corona of the glans.
I don't think that you have to worry about this being habi forming for your son to play with his penis. If you explain to him that these exercises should not be done in public, he most likely won't do it in public. At that young an age you have no worries about masterbation.
I hope that this is of help to you.
http://www.medhelp.org/posts/show/100324?camp=36
http://www.mic.ki.se/diseases/C12.html
Good Bless,
Ron