Pixel art usually looks better with higher contrast. It helps define things better too.
I don't agree with that color edit, low contrast can look good, as it does here. And perceptually near-black tones are something people should be more careful about using. And you lost the cute doll-like look by changing the eyes.
the levels:
"contrast" spreads the tones out. Can make something feel flat even, because of evenly distributed values.
My first observation is you have a lighter shade completely hugging the borders of things. Think about that. If this was a painting, would that be the case? Unless strongly backlit, light usually wraps around a form, you could use that lighter tone to indicate the cloth's surface rather than having it completely flat, which now looks completely facing the camera, completely flat, and with beveled edges.
Secondary to that, it also creates
banding along the edges of everything you are "highlighting". (For more information, ctrl+f the word "banding")
I just got ninja'd.. so:
This is a nice edit. You get a great impression she's in a hot and harshly lit environment, parts of her are fully occluded by shadow, but she doesnt look like a secluded still life or model with a light source floating in a 3d editor, she retains the impression she is still in an environment because the palette is unified without the near black tones creating 'holes' or punching through the image. This is because the ramp is less contrasted, with tones clumping towards the mid-dark end, rather than being evenly spread out.
The levels:
Here we see a representation of the impression we first got, nice subtle shades going from shadow to midtone establishing the character, and then the light from the sun illuminating at the highest end of the spectrum. The contrast here is not forced, but natural, and created from the light source, rather than an arbitrary algorithm that forcefully seperates tones.
(these levels were done after isolating only the sprite onto a transparent background.