Here's a size comparison of a player-sized sprite and the one from the Paladin:
You
could try to reduce the size, but I've done so a few times with the weapon sprites from this mod, and frankly, it's a major hassle. On top of that, you'd have to make over a dozen adjustments to make a complete sprite set for just one (!) part of the armor. Rinse and repeat for leg part, shoe part, arm part, and helmet.
I thought about doing something like "Drop Your Armor!" in the past already, but after realizing what had to be done, I decided against it.