As far as I know, you cannot change the size of stock iOS wallpapers.
In the Settings menu under "Brightness and Wallpapers" selecting "Wallpapers" will bring up a sub menu where you can choose something from your camera roll or photostream.
Whatever you select will come on screen with the option to "Move and Scale":
Move image with your finger.
Scale by pinching in or out with two fingers.
Hit the "set" button, and it will ask where you want to assign it.
Lockscreen, homepage or both....
Thanks for the reply. When I try to pinch it to make it smaller, it goes right back to the size it was. Moving it does the same thing. I'm really disappointed more and more as I discover things I could do before and can't do now.
I don't have problem with iOS 6 but I have it now with iOS 7 because I am using same photo with iOS 6 and it was fit to lock screen but with the iOS 7 same photo is not fit and tried to scale it but still not fit!