You guys are both right. It is true that it shrinks vertically more. However, I felted my husband's hat that was too large and it worked. As someone advised, I pulled it lengthwise to compensate for it. (First, I measured the original length to know how long it should be).
Plus, it smothered the texture and made denser fabric. I liked the result.
On a side note, next time I would try to reknit the ribbing on a fewer number of stitches (I don't think I could go much lower in needle size). Somehow this hat still has a tendency to slide upwards a bit