Does rubbing a clitoris make the hood bigger after time?

First of all some clarification

'My vagina has a oversized clit hood' Your vagina is the birth canal. Your clitoris is separate from it, and your uretha (pee-hole) is in between. I think you probably mean your vulva.

'my labia is really small' You have two sets of labia: outer and inner lips.  Are you talking about your inner lips being small? Sometimes the inner lips do hang. This is usually not a problem, just how things are for some people. Sometimes they hang so low that they chafe and become sore. In that case they can be trimmed. But speak to your doctor first. 

'my clit hood is so big that it hangs' The clit hood covers and protects the clit (like the penis foreskin). So I would caution against surgery. You don't want to risk clit damage unless absolutely necessary.

'I was worried that the way i masturbate is making it bigger' You have not described the way you masturbate, so it is difficult to answer categorically, so please give a bit more information. A common way of masturbating, rubbing/circling the clit, probably wont enlarge the clit hood, but may impact on the clit itself.

Don't worry about size. The clit's function is pleasure, so don't risk spoiling that. Be happy with what you have. When you are older you may be very pleased with what you now perceive as an issue. Only seek medical attention if there is something not working as it should, or is causing physical discomfort/pain.

'I was worried that the way i masturbate' I assume that the way you masturbate is physically satisfying?

Hope this helps. I'll try and look out for your feedback.