I agree strongly with pmusser, but I would like to make a couple additions.
First, you should definitely correct her every and any time she makes an error. As pmusser said, make sure she's alright with this though to prevent any issues between the two of you. That said, I would say that not only should you tell her she said something wrong, and tell her what should be said instead and why; you should also make sure she then says it correctly! She needs to create the good habits, and reinforce them whenever possible. Just knowing she says something wrong wont have much of an effect unless she actively tries to correct the issue. I know that I bite my fingernails, and I know that it's a bad habit; but unless I actually actively force myself to stop I'll never break the habit.Even native speakers will do this. They'll catch themselves in the middle of a sentence or word and correct it with the proper phrase/word. It's better to do this and seem like you're stuttering than to continue reinforcing bad habits.
Also, as pmusser said, she has to want this. If she doesn't care that much about perfecting her language then she wont make much progress. The more invested in it she is, the more quickly she'll improve. In order to keep this interest high, you should not only encourage her, but also congratulate her. When you notice her saying something correctly that she used to say incorrectly, tell her! Let her know she's making improvements, reward her with some more encouragement. If all she ever hears is how she's doing it wrong, she'll quickly stop caring because she wont feel that it's making any difference.