To simplify the expression \((5^{-1})^2\), we can apply the rule of exponents which states that \((a^m)^n = a^{m \cdot n}\).
Applying this rule:
\[ (5^{-1})^2 = 5^{-1 \cdot 2} = 5^{-2} \]
Now, to remove the negative exponent, we use the fact that \(a^{-n} = \frac{1}{a^n}\):
\[ 5^{-2} = \frac{1}{5^2} \]
Calculating \(5^2\):
\[ 5^2 = 25 \]
So,
\[ 5^{-2} = \frac{1}{25} \]
Thus, the final simplified expression is:
\[ (5^{-1})^2 = \frac{1}{25} \]