Little woman embraces English rebel in school (7)
I believe the answer is:
academy
'school' is the definition.
(academy is a kind of school)
'little woman embraces english rebel' is the wordplay.
'little woman' becomes 'Amy' (character from the novel Little Women).
'embraces' is an insertion indicator.
'english rebel' becomes 'Cade' (15th-century rebel Jack Cade).
'amy' enclosing 'cade' is 'ACADEMY'.
'in' is the link.
(Other definitions for academy that I've seen before include "Secondary school" , "institute" , "Establishment for the advancement of knowledge" , "School independent of an LEA" , "Place of learning" .)