My parents just explained it was normal but to do it behind closed doors etc.
This is the advice I have come across before and what I will use when DD1 is old enough to worry about (she is 2 at the moment). I believe it is very common and is very normal. My DD1 has been 'rubbing' herself against the seat belt buckle in her car seat since she was about your DDs age. I pretty much ignore her although I have in the past asked her what she was doing - out of interest to see what she would say. In the early days, she said "I'm rubbing", now she answers that she is "doing a poo" ????

In some ways I see it as a normal part of developing a healthy sense of self and sensuality. Working out how your body works. It's just a pity in children it is in public as they don't know better. I really don't want DD to develop the idea that what she is doing is wrong but I also want her to understand that there is a time and a place...