When you see y, it has one of two functions:
- It refers to the complement of a verb that connects with à.
- It refers to a place (regardless of the original preposition).
With only the context of one sentence, the place reading is technically possible here and would mean she participates in that place. However, all things being equal, I would be inclined to go with the complement reading instead, because complement pronouns are not often dropped and because a place would be just as likely rendered là instead.
Hence, you could think of it this way:
Lady Gaga could take part in it too.
After you added more context, it became clear that this was the right reading: she needs something to take part in and it’s « cet album ».
You can verify that a verb connects with à by checking any decent dictionary. WordReference lists the full participer à.
Note that just as not every y is an à, not every à is an y. If it refers to a person or other living entity, you’ll use an indirect personal pronoun instead (third column here). The exact rules for how to do this are their own question.
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