Reduce Menu items width,height and textview size

use this :

<item name="android:listPreferredItemHeightSmall">72dp</item>

Example:

 <style name="popupMenuStyle" parent="@android:style/Widget.PopupMenu">
        <item name="android:popupBackground">@drawable/dropdown_bg</item>
       <item name="android:itemPadding">25dp</item>
       <item name="android:listPreferredItemHeightSmall">70dp</item>


    </style>

I can reduce the height and text size of the menu items with the help of below codes:

res/values/styles.xml:

    <style name="AppBaseTheme" parent="android:Theme.Holo.Light.DarkActionBar">
 
        <item name="android:dropDownListViewStyle">@style/PopupMenuListView</item>
        <item name="android:actionBarWidgetTheme">@style/PopupMenuTextView</item>
        <item name="android:popupMenuStyle">@style/PopupMenu</item>
 
        <!-- Change Overflow Menu ListView Item Height & Property -->
        <item name="android:listPreferredItemHeightSmall">10dp</item>
        <item name="android:listPreferredItemPaddingLeft">5dp</item>
        <item name="android:listPreferredItemPaddingRight">5dp</item>
    </style>
 
    <!-- Change Overflow Menu ListView Divider Property -->
    <style name="PopupMenuListView" parent="@android:style/Widget.Holo.ListView.DropDown">
        <item name="android:divider">#FF0000</item>
        <item name="android:dividerHeight">2dp</item>
    </style>
 
    <!-- Change Overflow Menu ListView Text Size and Text Size -->
     <style name="PopupMenuTextView" parent="@style/android:Theme.Holo.Light">
        <item name="android:textColor">#00FF00</item>
        <item name="android:textSize">5sp</item>
    </style>
 
     <!-- Change Overflow Menu Background -->
     <style name="PopupMenu" parent="android:Widget.Holo.Light.ListPopupWindow">
        <item name="android:popupBackground">#888888</item>
    </style>
 
</resources>

Add the above codes in styles.xml(v11) and styles.xml(v14).

For More Detail:

Refer Action Bar Overflow Menu Customization

In style.xml add this

<item name="android:listPreferredItemHeightSmall">35dp</item>
        <item name="android:listPreferredItemPaddingLeft">5dp</item>
        <item name="android:listPreferredItemPaddingRight">5dp</item>