This is a bit of a hard question to answer, as folktales aren't exactly a distinct genre, rather they're a distinct feel. You can easily make a Sci-fi or fantasy story, but to get the feel of a folk tale is hard to put down to paper. To know the reason for this, let's look at the definition of a folktale:
A story originating in popular culture, typically passed on by word of mouth. (First definition that shows up on Google)
So, that's pretty broad. But an orally spread story has its own limitations and strengths. Here's a list I've made of certain Folktake characteristics that may help you out.
- Simple: Remember, this is usually spread via word of mouth over many generations. You don't want some Simarillion or Lovecraft deep mythos. Only a couple of characters, only a couple of settings, keep things at a minimum and keep things memorable. That's why folktales spread, right? Memorability is key here. It also makes sense seeing as most folktales started when access to the Internet and other knowledge was very limited, and you pretty much write what you knew.
- Sapient Characters: Folktakes either contain actual human characters (Johny Appleseed, Pecos Bill, etc.) or animals that are, for all intents and purposes, human (Aesop's fables are the prime example of this, and the most famous). This is because human personalities are a lot more memorable than animals (not to say animals don't have feelings, don't call PETA on me). Making them human also makes it a lot easier to fulfill my next point.
- Morals: Folktales either teach a moral (Like Aesop's) or create a role model on which to act like (John Henry and Davy Crockett are examples of these). This, again, makes the folktale memorable. It's a lot easier to remember a simple moral lesson rather than the analysis of an epic poem.
- Forget Being Realistic: This should go without saying, but there's no real boundaries as to where your folktale can go. In your world, John Henry can beat a drilling machine, or foxes can talk to sheep like any human. But remember my first rule, keep it simple.
So, what's the takeaway from this? Keep it simple, have sapient characters, have a moral, and don't feel restricted. Most important, MEMORABILITY IS KEY. I wish you luck on your future endevours.