。
She entered the contest.
Literal
She [topic-は] that contest [in-に] participated.
参加する ('to participate, take part') uses に for what one is participating in — meetings, contests, ceremonies, projects. Compare 出席する (to attend, formal) and 参加する (to participate, less formal): both take に, but 出席 emphasizes physical presence while 参加 implies active engagement. コンテスト is the loanword for any organized competition with judging — beauty contests, talent shows, art prizes, eating competitions — distinct from 試合 (sports match) or 大会 (tournament).