Well i think you're doing everything right, it's something that he's having a hard time talking but I wouldn't panic, just encourage.
DD was very much like that, she didn't start talking till 2.5 only little words, she's 3.5 now and she won't shut up! She too had a dummy (a lot!) she gave it up a couple of months ago without issues. DS started talking early and he's 2 and he can string sentences together but I put that down to having his sister talking to him all the time.
I would encourage play dates with other kids, that really helped DD because she wanted to communicate with her friends so she had that incentive.