K, just for the record, cotton has absolutely NO stitch memory at ALL!! LOL
Sooo, that being said you have to "refresh" it everytime you wash it.
But beings it's a smaller sweater it should be ok, just DO NOT hang it. Cotton when it is wet is very very heavy and it will stretch because of gravity, so either dry it on low in the dryer til it's dry or lay it flat on a towel or absorbant surface, forming it into shape. It's not near as picky as wool yarn but not as carefree as acrylic. O yeah one more thing, ALWAYS, ALWAYS wash in cold or the item will shrink (think blue jeans).
So one advantage of cotton is that as the child grows mom can take the sweater out of the wash n stretch it a little bit then let it dry and it'll hold THAT size n shape.