ADDING TO WHAT I WROTE BEFORE: JUST BUILDING OFF OF JEN C'S ADVICE OF THE HELIUM BALLOON. PERHAPS PLANTING A BABY TREE THAT WILL GROW FOREVER, IN MEMORY OF YOUR CAT?
Talk to her like a little person. Tell her the truth. I would advise against saying the cat was sick or that it went to sleep and won't wake up for she'll be afraid to get sick or go to sleep.
Tell her it is okay to be sad and ask as many questions as she wants. And, then find a way to commemerate you cat. A portrait on the wall, or maybe you can laminate a photo for your daughter to carry around with her.
I had to explain my father-in-law passing to my 2.5 year old son in January. We told him Grandpa went to heaven. He said "He's gonna come back." We said he can't come back and my son says "You gotta say please."
I understand how heartbreaking it will be. But, just don't hold anything back, tell the truth and tell her its is more than okay to mad, angry, scared or what have you.
I don't know if you guys are into the whole "heaven" thing but you can tell her your cat went there. The cat will never hurt or be sick again and the cat is looking down on all of you.
Good luck!