My daughter has a red and slightly yellow tinged rash appear on her ankle after she played outside. Slightly larger in the morning. Should I worry?

See Your Doctor. Rash is a very general term and without further details, cannot reassure you to not worry. There can be several causes such as insect bites, allergic reactions, foreign body and more. Also important to know duration, associated symptoms such as itch, pain, etc. Additionally, visual inspection is a must when evaluating rashes. See your doctor for proper diagnosis and management.
Mgt. It may be related to contact dermatitis or insect bites given the timing and distribution. A photo of the lesion would help in identifying the cause.