Yes it is a correct sentence, although a little familiar.
Step-by-step rundown:
“Ça” is the contracted, familiar form of “cela”, which means “that, it”.
“me” could be placed after the verb as “moi” : “Cela fait rire moi”. It is not correct french, but keeps the Subject-Verb-Object (SVO) syntax.
“faire rire” is directly translatable as “make laugh”.
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