People above have given some great advice. Definitely want to rule out that it's a visual problem, too, like Colleen suggested!
I can't really say what might be going on, but I did want to suggest keeping the reading a fun thing and not a chore. (Even though learning new words & proper grammar is sometimes work!) My mother read to me & my younger brother every night for years when I was a kid, and I LOVED it! (
Still love listening to stories

)
I remember it, mostly because while my mother was reading, my brother and I would sometimes sit next to her and look at the pictures, or even quietly play on the floor while she read aloud. It was a relaxing, enjoyable time that focused on the story and on having a little fun. As I grew older and could read books by myself I retained that "this is fun" attitude. I still read just about every night before going to bed.
I know reading frequently is not something high to do on everyone's list, but it always breaks my heart when I hear kids say "I hate reading."
You seem like a VERY caring & dedicated mother to want to help your child improve her reading! I'm positive that with time, and trial and error, you'll find what works for her.