My previous supervisor keeps asking me to review her papers. How to deal with this?
No it should not be normal. It is the decision of the editor to pick a specific reviewer. As a reviewer, you are supposed to keep the manuscript confidential. While i would see that this can be argued if you ask somebody working in your organization and reporting/being supervised by you, i think giving material to somebody whom you do not have direct control over in another institution is a pretty bad violation of the usual journal policies.

There are a number of bad situation which could arise from this 


You actually having a professional relation to the peroson which you review (without your former professor knowing) 
You telling your new boss about this, and he/she deciding to do politics using that knowledge (delaying etc)
You plagiarizing the paper, without the editor being able to track how that ended up there (since nobody knows about it)
You asking for changes to include references to your papers (innocent, since the editor team wont catch it...)


So no, beyond you not getting credit, i think it is a pretty shady thing.

(Added after comment): There are essentially two options, which depend on the mindset of your supervisor. 


You explain what I wrote and tell that this makes you uncomfortable - you don't have to tell about her taking credit for your work, so it is less personal.
You inform the editor about the incident, pass your review, and ask the editor to be confidential about it. (I would imagine that they may just remove you former supervisor from their list)