Prayers Accepted in the Merit of Tzedakah

The Chida zt”l (Sefer Bris Olam, Siman 226) explains this pasuk by quoting the Medrash (Socher Tov 65) that says that anyone who performs acts of chesed will have his prayers accepted.

When Yaakov said that he had grown small, it can be seen as a reference to tzedakah. (He had grown smaller by giving away his possessions to tzedakah.) He was thus saying that because he gave tzedakah, he was worthy of davening to Hashem and having his prayers heard.