The correct answer is B. Capitalize tennessee
Step-by-step explanation:
According to grammar, capitalization that is about writing the first letter of a word in uppercase should be used in the first word of a paragraph, text or after a period and in case of proper nouns this includes names of people and places (continents, countries, states), names of geographical landmarks (national parks, rivers, oceans), days of the week or months, specific historical events (historical periods, wars), among others. This means in the case of the sentence "he famous Battle of Shiloh was fought in the southern state of tennessee" the change that should be made is capitalize "tennessee" as "Tenessee" as this is a proper noun of a state and according to grammar proper nouns of places should be always capitalized.