It's perfectly normal. In fact you should encourage it, and it's fine and wonderful that you play with him by "talking" for his stuffed friend. It will not hurt him or make him unable to tell the difference between reality and fiction. It actually is helping him by encouraging his verbal skills and imagination! Why does this concern you? Are you worried that somehow he will actually think the animal is really alive? He is at an age where he is processing things like the difference between "real" and "not real" and he will be fine. If he seems to you to be thinking the animal is alive, be aware that he is pretending -- he may want to give the animal food, for instance, so go along and give him a little bowl of Cheerios or something dry and tell him to be sure to have some for himself.
It is much, much better for him to be playing with mom and his toys -- being together with you, engaged in imaginative play -- than for him to be plopped in front of the TV. Truly.
So keep it up. Do more of it!
My daughter is 11, very mature for her age, but also loves her small group of stuffed animals deeply. So do I. She and I still play with them, having them talk through us, giving them adventures sometimes (yesterday one slipped into my bag and came to church with us -- yes, I did it, and we both had a blast). She has no problem distinguishing between real and fictional, and in fact she has a great imagination. So keep up the good work, S.!