。
She can play this song on the piano.
Literal
She [topic-は] this song [object-を] piano [with-で] play [thing-of-こと] [object-を] can-do.
Two key pieces. ~ことができる ('can do X') is the longer-form potential, slightly more formal than the irregular potential built directly on the verb (here 弾ける would do the same job in a single word). The で marks the instrument or means — 'with the piano,' 'on the piano.' 弾く is the dedicated verb for plucked or keyboard instruments — pianos, guitars, violins — distinct from 吹く (wind instruments) and 叩く (drums). Japanese is unusually fastidious about instrument-specific verbs.