Small crew with the Queen's ship (7)
I believe the answer is:
steamer
'ship' is the definition.
(steamer is a kind of ship)
'small crew with the queen's' is the wordplay.
'small' becomes 's' (abbreviation - e.g. clothes size).
'crew' becomes 'team' (I've seen this before**).
'with' means one lot of letters go next to another.
'the queen' becomes 'er' (Elizabeth Regina).
's'+'team'+'er'='STEAMER'
(Other definitions for steamer that I've seen before include "housed in galley" , "like the African Queen!" , "Kitchen pan; ship" , "put over cooker" , "Cooking apparatus" .)