Comment 6 for bug 283536

I had this same problem for a while, but thanks to Rolf Leggewie comment, i looked at pidgin-extprefs and found that this package has an option to allow pidgin to resize the window.
To do this, just access the plugins option under the tools menu. Then select Extended preferences (pidgin-extprefs) (if you have it, or download it if not), and then select configure plugin. The last option is to allow body list to shrink.

I hope this helps
Cheers