There are colleges that will admit your daughter with just one year of foreign language. Some of these will be schools that don’t require foreign language at all and others will be places that ordinarily do but will waive the requirement because your daughter got shafted when her school eliminated Spanish before she could complete two years. (She and her school counselor would have to write an explanatory letter and hope for the best.)
However, “The Dean’s” advice would be for you to encourage your daughter to take a night class next fall (or a summer class now) in order to make sure that she completes two years of foreign language. (There are also some very fun study-abroad summer programs, but these can be pricey and would have to include an intensive classroom component in order to count as actual language study and not just vacation!)
By applying with only one year of foreign language on her transcript, your daughter will definitely be limiting her options. The more selective colleges are typically looking for three or even four years and would consider two years to be the bare minimum.