I think it would look pretty if you cut it mid-way down her back, like where her bra strap would go. It's a manageable length, and is still long enough to show off all that gorgeous hair. Maybe you could cut some layers cut into it, too or add some side-swept bangs.
Thanks ladies! She will be 5 in October. I know I will cry whenever we decide to get it cut, but it's such a hassle to deal with. She loves her hair, but dreads getting it washed or brushed. Ugh. why does this have to be so hard! Lol. Most likely I will keep the hair as a keepsake. My mom still has the 15in braid from my first haircut.