The best way I know is to show the students that its belongs to the group of possessive pronouns that includes his, hers, ours—none of which has an apostrophe. Show them the similarity between, say, "The dog bit his tail" and "The dog bit its tail." There is no apostrophe in his and there's no apostrophe in its. But it's belongs to the group of contractions that contract is: he's, that's, etc. Show them the similarity between "It's a good idea" and "That's a good idea." There is an apostrophe in that's and there's an apostrophe in it's.
Copyright 2018, D. W. Cummings. All rights reserved.