They're both correct ways to say "I was there". Probably the most widespread variant is "ci sono stato", e.g.:
- Sei mai stato in Italia?
- Sì, ci sono stato.
"lì" means some place not very far from the speaker or the listener.
"là" means some place distant from the speaker or the listener.
"ci" is a particle that in this case can have the function of an adverb of place meaning "there".