Some cats are just 'scaredy cats' and once they decide they're afraid of another pet, like a dog, they will avoid contact at all costs.
I would definitely not tell you to give it time, because 2 years is quite sufficient to see that your cat doesn't want to be around your dog and she's afraid. Unfortunately, this is a situation that will most likely remain the same, and you'll have to make some changes around your home to make sure your cat does get attention and know that she's still cared about.
I recommend trying introduction techniques, as if they were meeting for the first time. The 'scent transfer method' is great: take a slightly dampened washcloth or paper towel and pet your dog, then pet the cat, then the dog again. Repeat this frequently throughout the day. Depositing the dog's scent on the cat's fur will help the dog smell more 'familiar' to your cat and once she's familiar with the scent, she might fear it less. Also, your cat might benefit from a cat appeasing pheromone called Feliway/Comfort Zone for Cats, which comes in both a spray and plug-in diffuser. It's available at major pet supply stores, and also online. The diffuser resembles a plug-in air freshener, but has no scent to humans. Feliway helps to relax stressed or anxious cats, and is useful in a multitude of situations. For more information, please see: www.catfaeries.com/feliway.html
Try placing your Sheltie in his kennel in the middle of the room, and have your cat sniff around it. If she knows he can't hurt her, but they're face to face, she might realize there's not much to fear. I realize if he chases her when she runs away, this is part of the problem, so if you could train him not to chase her, she might feel more at ease around him.
Continue to keep them separated so your cat isn't constantly stressed out, but allow her to have free roam of the house, while the dog is in another room (with a closed door), or being walked outside. Continue to give your cat lots of attention, grooming and loving, so she doesn't feel left out, and like the family is favoring the dog, over her. She might come around one day, or she might always fear the dog. She might learn to 'tolerate' him, but never be 'friends'.
I hope things improve very soon!