动词curl的释义之一为：

to form or make something form into a curved shape(+ adv./prep.) 

curl something (+ adv./prep.) 

She curled her legs up under her.

本句中curled up为此用法的过去分词：

She lay there and curled herself up in a foetal position. 并列谓语。

She lay curled up in a foetal position.

curled up in a foetal position. 为过去分词短语作状语。表示躺的方式。