The clover is a guaranteed drop from Leprechauns but can also be found in specific locations (e.g. the Moon Challenge, Vlad's Castle, The Black Market etc.) There are also several Leprechauns in The City of Gold.
The Four-leaf Clover is an item which will extend the ghost timer by 2 minutes upon pickup. But if the ghost has already appeared, then the clover will no longer help. It also does not prevent the ghost from spawning through other means, like the Curse Pot being destroyed.
Collecting the clover will spawn a half-rainbow sprite somewhere in a level occasionally. If you bomb right underneath said sprite, a Pot of Gold will spawn and whipping it (or using other weapons like the Machete or the Shotgun) will sequentially spawn coins until breaking up to a value of $6000 - $10000.