Since you are both female, you want the autosomal DNA test, either AncestryDNA from Ancestry.com or Family Finder from FTDNA. You both need to use the same company!
I prefer FTDNA, but there is an advantage to using Ancestry, if you use Ancestry you can transfer your results later to FTDNA at reduced cost, which allows you to research in both databases. Only FTDNA accepts transfers, so if you think you might be interested in this test first at Ancestry.
Whichever way you go, once you both have your results you'll want to upload your raw data to the GEDMatch website; it is a free site that allows you to do a number of analysis routines and compare your results to many others'.
If she IS the niece of your father you should known almost immediately, you'll share a sizable chunk of DNA. Good Luck!