As I understand it -- and I know that this is up for debate, so feel free to correct me, obviously -- the average resident of medieval Europe was somewhat shorter than modern humans.
Were "little people" (which I believe is the preferred nomenclature these days) similarly proportionally shorter?
The short answer is no, not really. The idea that Medieval people were shorter isn't entirely correct in the way it is portrayed. In fact, in the early medieval period (9th -11th C) were just as tall as we are today. Over all, the average height went down after that by about an 1.5" to 2". Of course, this is the average height - so you wouldn't notice anything too strange about the average Renaissance (15th & 16th C) person nor would they you, for the most part. There is more here on average heights as well.
Basically, it comes down to health in early childhood. A person with dwarfism during the middle ages could have gotten employment early on in many of the courts of Europe. At the time, anyone with dwarfism was considered a novelty.