yup! just send her a permanent friend request on it, and accept it on her phone, and you'll be able to track her as much as you want!
I believe gbrenik is referring to the Find My Friends app. In which case if you haven't already done so you will have to install this app. You won't be able to wipe the iPhone or send a tone or pop up message like Find My iPhone though.
If you and your sister share an iCloud account you would be able to add her iPhone. Or she could set up Find My iPhone on her own iCloud accountand login to her account in the Find My iPhone app on your iPad or any PC/Mac/iPhone/iPad.