The shelter caught fire as the family was burning wood to keep warm in the freezing cold in the village of Gajoturka, 16 kilometers (10 miles) northeast of the region's capital city of Muzaffarabad.
"The children were aged between two and six years," a health official said, adding that three others including a 75-year-old man were seriously burned.
The October 8 quake, the worst in Pakistan's history, killed nearly 74,000 people and rendered more than three million homeless in Pakistani Kashmir and parts of the country's North West Frontier Province.
Seven people died last month in a northern village when their tent caught fire.
Earlier in December, eight people including two Turkish engineers were injured in a similar incident. One of the Turks died later in hospital in his home country.