It's easy to re-activate a contact's membership.
Here are the steps:
Go to Contacts.
Search for the Contact who needs the membership re-activated.
Select the Contact to edit.
Under that Contact's Memberships, select the relevant membership you wish to cancel.
Select the Activate button to change that membership to Active.
You'll see the status updated to Active.
That's how you update an individual's membership from Cancelled to Active!