It's difficult to say if your shepherd will get used to this. She might or she might turn into an "anxious biter". Is it possible to put your dogs in a harness with an extra long leash that will keep them together and which can be extended and pulled in at the owner's discretion?
Training might help - dogs can learn new things at any age but socialization usually begins when they are puppies. Personally, I never let my dogs off their leashes because there are too many irresponsible dog owners who just let their dogs run free without socializing them. I would hate to see your shepherd get into difficulties if he/she turned into an "anxious biter".
lonewolf
Dog parks are a real problem because most of the dogs are not at all socialized. They're unstable because most people just assume that all dogs instinctively know how to "get along" and "play nice" with one another. They don't.
I wouldn't recommend that you let your shepherd off leash at this point when you're at the dog park. Her fear will sooner or later turn into fear aggression and she WILL attack a dog who she thinks is a threat - whether it's real or not.
So, what to do about it? All you need is some basic knowledge about dogs, training, and how dogs interact as a pack. If your dog saw you as her leader, she wouldn't be frightened. Is there a possibility that she is trying to protect YOU from a threat rather than herself?
There are plenty of books available at the library that can help if you can't afford training. (Hint: dog training is actually all about training the humans!) I can highly recommend any of the books by Cesar Millan, The Dog Whisperer. They're very easy to understand, and you can immediately begin using his techniques. You will learn to understand how dogs communicate with one another and recognize exactly what it is that scares your shepherd. Once you recognize the problem, you can help her overcome it.
It is so much fun to learn how to "speak dog". As you work together to overcome her issues, your relationship with her (and all other dogs) will change in ways you could never imagine. :-)