The best thing you can do for any shy dog is to make them work for their meals, kibble by kibble, by visiting the local pet store with a pocketful. Have her sit, and have her get her kibble from strangers - everyone you meet along the way.
DO NOT pat her or comfort her, but tell her she's a good girl only when she faces up to a new person. Put her through an obedience routine downtown, lots of sits and downs, to keep her mind occupied. You don't want her spending her time worried about what is about to get her- you want her to see you as a strong leader who will make the decisions.
Take her to obedience classes continuously until she is doing well, and then go to a refresher class to keep up. Structure, structure, structure. Make sure she is not overtired, and make sure you go home when she has attained a goal for the day - and set up goals she can actually reach. You should be challenging her, but not putting her in a situation where she falls apart because it's too much for her brain to handle. And always end on a good note - know when to quit.
Fearful, shy dogs can be the most dangerous if this not is not dealt with, so it's good you recognize the situation. This is part of the problem with the miniaturization of herding breeds, and has done the dogs a disservice. Lucky for this dog, she has someone who cares about her enough to teach her to be her best.
Good luck!