DD was a bit like this. Social is still the thing we notice most at 7 though she does very well, has friends, manages well at school etc. I don't think she had "friends" at 3yo (whereas DS did already at that age). I remember at that kind of age she was interested in other kids but watched from afar - or might run up to them in a playground but not know what to say. We did a bit of modelling if we were in the playground with another kid who was interested. In the end she really connected to other kids when she was a little bit older (4 or 5), because she had good ideas about games to play and they would ask to join her. I remember she went through a big phase of collecting sticks to make birds nests, and then leaves and things to line them with. To begin with she just let the other kids join in without saying much, but over time and with a bit of supervision she learned to talk to them about what they should do, what bits would be good to collect, etc. We often found conversation came much more easily around an activity or a craft rather than just chit-chat ("what's your name" or whatever ...). That's still true now. DD had a lovely play in the park the other day with a little boy collecting bugs together and trying to learn about them - talked about all kinds of stuff, but she came back with no idea what his name was or how old he was. But they'd both had a nice time :)
She can still present as very shy, and if the answer to a question is "no", even with us, she will often default to not answering. We just try to explain why it's important to answer and model appropriate answers. I agree with using interests to build conversation skills. Also, we found with DD she would do things with us first, then with other trusted adults, then with less well known adults, and only in the end with other children. Children are just a bit unpredictable and unsatisfying as conversation partners I think, so we always tried to give lots of opportunities to practice with us and other trusted adults first.
Processing emotions is also a big deal as Big City said. We found the Molly Potter books on feelings/emotions/friendships very good at that kind of pre-school/Reception age, and DD is still very interested in more grown up books of that type (like "Diary of a Social Detective") that now she is older.
Another helpful thing we did when she was 3 or 4 was a diary at the end of the day when she was 3 or 4. She'd tell us one good thing that happened, one bad thing, and one new thing (as she was very nervous about new things, so we wanted to normalise that new things happening is a normal part of life, and often good/fun). We'd write down what she said, and I'd draw a picture of something she'd choose from the day. We often learned new things in those conversations about what she'd thought about the day or things that had been challenging that we might not have realised were a big deal for her, so that was very valuable I think. As she got a bit older she started to put a few of her own pictures in.
Generally if your DD is into books I'd encourage that, as stories/fiction are obviously also a great way to learn about friendships, feelings, how feelings can map into behaviours, etc. particularly as kids get older and the books get a bit more sophisticated.