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People have a right to defend themselves, their families, and their livestock from animals. But unless your dog was posing an immediate threat, there was probably no legal justification for shooting her. This is true even though you may have been violating a leash law by allowing your dog to wander onto your neighbor's property.
You do have the right to sue your neighbor in small claims court, but suing may not do much to relieve your anger and sorrow. It will certainly not make you wealthy. Some judges will take into account the sentimental value of a lost pet. But others won't -- in which case the most you will win is her "market value," which is very little for most pets. And if you were partly at fault (say, by leaving your dog off leash), the judge may decrease the already small amount you can get from the neighbor.
For more on small claims court, see Nolo's Small Claims Court Resource Center.