I think you should be able to block it by using a spray bottle of water to
Dampen the areas that need stretching. You would need to take measurements first so you know how long you want it to be and how wide at the bust, waist and hips then when it’s damp lay it flat
On a towel and gently stretch to those measurements and leave it to dry by alternating which side it lays on but not
In the sun as this may cause fading. Good luck, I hope you manage to sort it out as it’s disappointing when vintage pieces get ruined :-(

Sorry about the grammar in my last comment it seems whenever I try to comment from my iPhone it does this annoying thing where it randomly capitalises my letters and I don’t know how to stop this from
Happenning!

I have tried that a couple of times with old dresses now. But I would rather risk them schrinking than have to use them smelly. I don’t know if there’s something you can do to stetch it. I don’t think so - you’re lucky that it didn’t get so small that you couldn’t use it :)

Just found these instructions on the Martha Stewart website, I have actually used this method successfully on my vintage cashmere cardigans when they have shrunk after washing so know it works: http://www.marthastewart.com/265175/blocking-and-…

Nej vad hemskt. Jag kom precis från tvättstugan där jag tvättat två klänningar och en jumper som jag var lite nervös över… gissa om jag är nervös nu!?!?! :p
Hoppas din klänning ger med sig! fina tips här ovan.
Kram från Norrland

Yes, I agree with Vicky on blocking. Since you said it seems like a stretchy jersey (which if I’m not mistake is a knit fabric), it might just do the trick. Blocking is a technique knitters use all the time. You get more ability to manipulate the fabric if it’s wet. You could soak the dress in water, very carefully press the water out of it, then lay it out on a bed or something large, stretching it slightly where you need it. Rust-proof pins really do help in keeping its shape while drying. Might be worth a try!

Åh så synd, det är himla fin klänning! Jag fick rådet en gång att stryka på diagonalen, och liksom dra ut den. Men då måste man ju kunna stryka klänningen också…

I’ve also read about carefully steam-ironing it back to it’s original size, but I haven’t tried it myself. Do it just a little at a time and I suppose it will work.

This might come a bit late but I thought I could give some tips for later use. Some fabrics shrink in wash due to the way how they are woven. Crepe is one of these materials that always require some stretching and steam ironing after wash. It always helps if you properly open every crease and fold when hanging garment to dry and ironing when the cloth is still a bit damp helps to get original measurements back. Some materials are prone to shrinking in wash, even in cold water, linen is one of these materials. Same procedure as described above will help.
Wool and woolmix are tricky, especially in knitted fabrics like jersey. Wool doesn’t handle washing very well and tends to shrink, even in cold water. That’s why professional dry cleaning is often recommended on vintage wool garments. In this particular case I would try blocking first, since the material is unknown. Wool can take ironing and steaming, but some of the synthetics won’t. So I recommend you try instructions on Vicky’s link first and if that doesn’t work, then try ironing and stretching the garment when a bit damp after wash. One option might be to got to dry cleaners who are specialised on vintage garment (if there is any available) and ask if they are able to do anything to it. Dry cleaners sometimes have safer professional equipment and techniques that might work.