In the picture I know my saddle pad is too far back and I need to lengthen my stirrups a tad ( I fixed it don't worry) but people tell me my saddle is too small. I feel comfortable in it and my horse doesn't seem to mind it.
It definitely looks too small in my eye and I would think that it would throw you off balance, but I guess you're the judge since you're riding. Have you ever tried riding in a bigger saddle to see the difference? Sometimes you don't realize something is wrong until you feel it when its right, if that makes sense.
For instance, I have a tiiiiiny butt and I used to ride in a 16 or 17" saddle since the lesson horse I rode fit that saddle well. I assumed it was good for me but always had a hard time sitting the trot and lope. As soon as I started using a new saddle though (different horse sadly) it was SO much easier. The saddle I use now is a 14" (I'm 4'11. Haha) and now I wonder why I ever rode in a big saddle!
What size saddle is the one you're riding in now, if you don't mind me asking, and do you have access to try another saddle?
Agreed, it does look small, but if you're more comfortable in it than in a saddle that "looks" correct I wouldn't worry about it. It's not going to affect your horse unless it's throwing you off balance.
The seat may be a bit small for you but not much and if it's comfortable so be it. I think the thing that really makes the saddle look "small" is the skirt - I've seen other saddles with the short skirt style and, while I recognize it's only a perception thing, they all look "small" on a horse period.
It is too small. However, if you are still centered in the saddle, I.e, not pushing more against the cantle than against the pommel, I think it wsould still be useable. Have you tried a bigger saddle to see how it feels?