Kathy is someone known by Two-Bit.
When recalling how he had nearly crashed into another car, Two-Bit mentions that it almost killed him and Kathy the night prior. He suggests for Ponyboy to see her brother, recalling his appearance. Kathy is Two-bit's "kid-sister" so she would probably be around Ponyboy and Johnny's age. Maybe around 15.
She makes no appearance in the movie or book, but only mentioned by name in the movie, and only referred to as "kid-sister" in the book.