Holding a security object can be calming to someone in the later stages of dementia. Don't insist that the person engage with the object (although he or she might, and that's great). Just having it around to see or hold provides the emotional link to a better mood.
You might be surprised by what works for your loved one. Some leading favorites:
Soft objects , such as a favorite shawl or a textured blanket
Animals , such as a real pet or a stuffed animal; they provide tactile pleasure
An object representative of the person's past: a newspaper, a briefcase, or a tennis ball for someone who once used these things every day, or a baby doll for a mother
A simple everyday item , such as glasses, a purse, a hat, or a watch
A photograph: Less common, since the person in the image is apt to be forgotten (but people have been known to grow attached to the frame itself)