How to kill the Werewolf

They aren't meant to be killed. In the tutorial area they are there to be designed to teach you not to steal from people while guards are around. If they kill you you just wake up after a while and lose some money, you don't even have to reload a save.

If you kill them they simply "respawn" and go about their day.

This fight is quite challenging if you are not prepared. After some experimenting I found the best tactic is to simply not get hit, this wraith deals too much damage in a single hit.

Before the fight drink a Wraith Decoction if you have one (it provides a Quen shield if a single blow deals more than 1/3 of your health in damage). If you have Spectre Oil apply it as well and use ThunderBolt if you have any.

Now that the fight has begun you will want to use the Yrden Sign and stand on the edge of the circle opposite to the wraith. This lures it inside the circle where it seems to become physical (the ghastly swirls around it disappear) and takes significantly more damage. Take this moment to get one or two strikes in with your silver sword but be careful to dodge (alt + direction) or roll (space + direction) out of the way of Jenny's swipe or this fight will end quickly. Repeat this, cast Yrden, lure the Wraith, land 2 hits and dodge.

At one point or another Jenny will disappear and three other wraiths appear. They are easily dispatched with one hit and you should do so as fast as possible (Jenny heals while this is happening and these wraiths can also drain you of health). As a last note, you should try to keep the fight close to the camp fire. I found that if I strayed too far I would end up with the trio of wraiths spawning in bushes or with trees and bushes between me and them. This added quite a bit of time to the total needed to kill all three, allowing more health regeneration of the target.