DVD Shrink is totally free and one of the most widely accepted and preferred utility for shrinking DVD discs.

DVD Shrink is capable of both re-authoring and re-encoding the movie. It features an intuitive user interface which makes it easy to choose what to keep, and what to lose.

DVD Shrinks allow the user to select compression level for each video track separately to obtain the desired disc size (which is usually below 4.38GB). The software is capable of producing either an ISO image of the ripped DVD, or a VIDEO_TS folder for further processing, viewing or burning.

DVD Shrink in action...  Actual Screenshot