“J’habite dans une petit rue s’appelle” is grammatically incorrect.

You can say either une petite rue qui s’appelle (literally “a small street that is called”) or une petite rue appelée (“a small street called”).

Appelée is a form of the past participle (the e at the end makes it feminine, to agree with rue – the base form is appelé.) French, like English, often uses past participles as adjectives.

The verb s’appeler is a reflexive verb. As is sometimes the case in French the reflexive verb is used where English would use a passive voice.

une rue qui s’appelle …

would translate into English with: a street (that is) called…,
(you usually only keep the past participle).

What Google Translate does is to keep the passive voice when translating back into French, making a word for word translation. It is not wrong but it does not sound idiomatic French. Using s’appeler is much better, in that case.

J’habite dans une petite rue qui s’appelle ___.

Other examples of instances where French would use a reflexive verb instead of a passive voice:

• Ce livre se lit facilement.
• Cette boisson se garde au frigo.
• Ce gâteau est tellement bon qu’il se mange facilement.