Verified answer

The crab hid/hid himself IN the sand of the beach.

Beneath the sand would mean he reached another substance -- rock, clay -- and the sand was on top of him.

Most people would say, “the crab hid under the sand.”  Using it reflexively (hid himself) is not wrong but is not generally used.

both are correct but Beneath the sand sounds better

Both are fine. You could also just use "in". 

The crab hid himself BENEATH the sand of the beach

or

The crab hid himself BENEATH the sand at the beach