Generally a tiller is designed to provide the correct leverage and strength of materials required by the steering loads that are anticipated. They vary widdely in diameter depending on factors that are beyond the simple ergonomics of a person''s hand. Typically the diameter of a tiller is somewhere between 7 and 8 inches.
The shape of a tiller derives from the shape of your cockpit and the angle of the rudder post. I would suggest that you try steering your boat in heavy conditions while holding the tiller "choked up". If that works then it should be easy to cut the tiller shorter and reshape the hand hold with a block plane and sandpaper.
As to bronze''s post about buying a new rudderhead fitting, I am not sure where he was going with that, but you should be able to adapt your existing rudderhead fitting to a new tiller should you go that route.