Yes, I took my little girl to the dance class and gymnastic class at our local recreation center. Since there are not too many toddlers in our area, the class size is usually very small (about 3-5 kids). However, it's about 1/2 hour drive to Palo Alto.
You can check out the Palo Alto recreation guide for the classes appropriate for toddlers too. They also have good classes but not sure about the class size as there are more young kids in Palo Alto.
The children's library in Palo Alto is nice, and you can check if they offer story time for toddlers.