For my model, I am using a cute and cuddly just-the-right-size-bear, as I do not have a little baby!
Lay your baby down just off the corner of the blanket:
Next, take the opposite corner (at their feet) and tuck it under the right shoulder:
Next, position your babies arms cuddled up at their chest and take the corner at your right and tuck that under the babies right shoulder again:
Finally, take the remaining corner and again make sure the babies arm is bent at the elbow and cuddled up close to their chest and wrap it across them and around the back:
You will now have a happy, snuggled baby as they are used to being in tight quarters. Please note that my bear does not quite have the elbow thing going on, and your baby will be easier to position. They may also want to have their hands available to suck on.