Adanae Liburd-Graham suffered 32% burns when the garment "went up like tissue paper", her mother said.
Her parents tried to beat out the flames with their hands but ended up burning themselves.
Adanae, now nine, said people should "stop, drop and roll" if an item of their clothing catches fire.
"I was scared that my mum and my dad would get burnt," she added.
Adanae was hurt on 25 December 2015.
"I can remember Christmas Day like it was yesterday," said her mother, Nicola Liburd.
"Her dress was just a normal 100% cotton dress from a supermarket, you wouldn't expect it to go up so easily and quickly - it can happen as quick as you can click your fingers.
"We started trying to bat the flames out but we were getting burnt ourselves. I've done first aid but we couldn't get her to stop and do stop, drop and roll."
They wrapped Adanae in cold wet towels and then took her to accident and emergency at the Queen's Medical Centre in Nottingham.
She spent four weeks at Birmingham Children's Hospital and a further two weeks in hospital in Nottingham, where she had significant skin grafting.
Her mother said she was so shocked she couldn't speak about the accident for a long time.
"I think it takes a long time to get over the guilt as a parent and adjust your life really to the new circumstances," she said.
She wants to raise awareness among parents that children's day clothes are not made from flame retardant materials, unlike nightwear.
Adanae is a keen gymnast, and thanks to physiotherapy she has been able to do gymnastics again.
However, her mother said the accident has affected her mentally and she feels more cautious and nervous about doing some activities.
The daughter of Strictly Come Dancing presenter Claudia Winkleman suffered serious burns when her Halloween costume brushed against a lit candle in 2014.
Ms Winkleman described how she and another child's father tried patting the flames out, but said they kept coming back.
"It was like those horrific birthday candles that you blow out and then they come back," she said.
"We couldn't put her out."
Her daughter's surgeon has called for fancy dress outfits - which are classed as toys - to meet the same safety standards as children's nightclothes.
Adanae's mother believes the campaign should look at normal children's clothes as well as fancy dress outfits.
A girl who suffered serious burns when her "normal, 100% cotton" dress was set alight by a spark from a fireplace has warned other children to be careful.