This is a good questions because you want to avoid plagiarism at all costs. Plagiarism is telling the story exactly as the storyteller did, using their words and word-for-word sentences from the story.
In order to retell the story you have to tell me about what you read or saw, but make it much shorter, and explain it so that I will feel as though I read or saw the story myself. As the others stated you will want to describe the characters, tell the plot and how it was all brought together.
As and example I would like to tell you the story of Itsy Bitsy Spider and the original story is as follows:
The itsy bitsy spider went up the water spout, out came the rain and washed the spider out, out came the sun and dried up all the rain, and the itsy bitsy spider went up the spout again.
Now I am going to retell you the story of Itsy Bitsy Spider:
This story was about a tiny spider and his trials during a normal day. He made an attempt to climb the water spout until it started raining and he was knocked off. However, the rain did not last and the sun came out later that day allowing the spider to complete his trip to the top of the spout.