M.L.
My daughter was the same. I advise you to just not mess with it and let it grow out. As her head and hair continue to grow, I bet it will take care of itself. My 3.5 y.o. has beautiful hair now. It's hard to believe that just a year an a half ago she was in the same boat.
p.s. - I actually read once that cutting a child's hair at too young an age can, basically, really leave you in a situation that I think is exactly what you are hoping to avoid. Maybe the person who gave you that advice knows some thing that I don't know, but I really don't think you should cut it now.
(Just my 2 cents 8-)