Start with destroying the pacifier by any means necessary, I used wire cutters and my multi-tool to accomplish the task. This is going to take time and patience. Then once the "nipple" part is free, make a cut down one side of it so you can add hot glue to the entire shape. Open the flaps and carefully add the hot glue, then close the flaps, some of the glue will seep out but you can just trim that later. Then you need to quickly slide the LED into there and let it sit and firm up.
To extend the leads, just solder wire to the leads.