The first option is correct. She is the tallest of the two.

'From' is not necessarily incorrect but in the sentence the word 'of' sounds more natural.

The correct version is "She is the taller of the two." So both of the sentences you gave are incorrect, I am afraid.

Hi Su, I found an article. I would like to know your opnion about this issue: http://www.grammarphobia.com/blog/2010/12/eldest.html Thank you for your help

The preposition you need is 'of', not 'from'. She is the taller of the two.