Here a purely complex approach:
A circle in $\mathbb{C}$ with radius $r$ around $a$ is given by $\boxed{|z-a| = r}$. Squaring gives an equivalent equation:
$$ |z-a|^2 = (z-a)(\bar z - \bar a) = |z|^2 + |a|^2 - (a\bar z + \bar a z) = \boxed{|z|^2 +\color{blue}{|a|^2} - 2\Re{(\color{blue}{\bar a} z)} = r^2}$$
In your case you only need to check whether you can rearrange your given equation into the boxed form. From there you can read off immediately the radius and the center:
$$|z + i|^2 = |z - (-i)|^2 = 4|z|^2 \Leftrightarrow |z|^2 + 1 - 2\Re{(iz)}= 4 |z|^2 \Leftrightarrow |z|^2 + \frac{2}{3}\Re{(iz)} = \frac{1}{3}$$
Now, a quick complex square completion leads to the desired result:
$$\frac{1}{3} = |z|^2 + \frac{2}{3}\Re{(iz)} = |z|^2 - 2\Re{(\color{blue}{-\frac{1}{3}i}z)} +\color{blue}{\frac{1}{9}} - \frac{1}{9} \Leftrightarrow \boxed{|z|^2 + \color{blue}{\frac{1}{9}} -2\Re{(\color{blue}{-\frac{1}{3}i}z)} = \frac{4}{9} }$$
This describes a circle around $\color{blue}{a = \frac{1}{3}i}$ with radius $r= \frac{2}{3}$.
+(y+i)^2You surely meant $,+(y\color{red}{+1})^2,$ there.Why is this set a circle?See for example Proving the Apollonian circle formula. – dxiv Oct 03 '18 at 01:26