Akili Li wrote:
Alice in Wonderland is in the public domain, anything in public domain is also fair game.
No, anything that is your own design
is fair game. This means you can make an Alice in Wonderland Knuffel, but the design of the character should still be your own, not one from, for example, Disney or some Alice in Wonderland picture book.
For the legends question: Of course you can make any character from any mythology, I do it all the time. But it is the same as what I said above: Make it your own design. If a character from mythology is usually described with certain attributes, of course you can add them, just don't copy an exact design you found somewhere (internet, books, movies, games, etc...), but make the overall image your own.