Is it permissible to propose to a girl with whom "sexual gratification over the phone" was practiced after she repented, or is it better to seek another chaste girl?

You have done well by repenting from the forbidden relationship, which is a type of zina (fornication/adultery) even if it did not reach penetration in the private parts, as the Prophet (peace be upon him) said: "The son of Adam has his share of zina decreed upon him, which he will inevitably attain. The zina of the eyes is gazing, the zina of the ears is listening, the zina of the tongue is speaking, the zina of the hand is striking, and the zina of the foot is stepping. The heart yearns and desires, and the private part confirms or denies that."

If you wish to marry her, there is no harm in that, because the zina that prevents marriage is penetration in the private parts, and that is if the woman who committed zina has not repented. However, if she has repented, it is permissible to marry her.

You should inquire about her from trustworthy people who know her to ascertain the sincerity of her repentance and her uprightness. If it becomes clear that she is so, then proceed to propose to her family and seek guidance from Allah. However, if she still shows weakness in her religious commitment or has bad manners, then seek someone else, for the best provision in this world is a righteous woman.