How can we encourage more people to participate in chat? Anyone with 20 reputation can participate. See the chat FAQ for more information about it. This particular chat room is for general discussion related to ELL.
The only way I can think of to incentive the use of chat is let other users know there is a chat which can be used for discussions about any topic that could be interesting to one who is learning English, or about the main site.
That said, I would add that we need more people to participate in both the main site and this very site. The chat site is secondary with respect to letting ELL graduate, even though it is the right channel for discussions, or light chats.
Also the participation on the meta site is secondary, but it is on the meta site where important aspects of ELL are discussed, especially those aspects that influence how future users will use ELL.
Clearly, instead of saying to users "Either you ask acceptable questions, or you don't use ELL," it is better to say "Although your questions are not acceptable on ELL, you can ask in the chat room." As long as that helps keep users around ELL, that is good.
The easiest way to encourage further participation in chat, is for us to start using it ourselves.
I've noticed that on some questions and answers, extended discussions have been happening in comments. On other SE sites, moderators sometimes move these to the respective chat room and delete the comments (there's an MSO feature request here to do it automatically too).
Chat, like Meta, can be difficult to get people to be involved in - but once it is up and running it can be really good.
We can encourage people to use the chat by commenting on these "comment discussions" and inviting the participants to take the discussion to chat rather than having it on the question/answer. The resolution of the chat can then be used to update the question/answer if need be. Chat is a great way to discuss things at length with other users or even just have a friendly chat and get to know each other.
We need to make sure that the chat is civil, friendly, supportive and welcoming to newcomers to encourage them to come back. If some of our most active users started things off, I'm sure it'd catch on.
As (what I think is) a good example, The Whiteboard (from Programmers.SE) is a room that I sit in all the time. We're fairly active in there and talk about anything and everything (in fact, ELL has been mentioned a few times in there and even some of the P.SE crew have checked our site out
:)). It's a good way to get to know the active users of the site, and keep in touch with the moderators too. We also allow users to come and ask if their question may be on-topic/off-topic and we assist with writing/rewording questions.