Wool is an elastic fiber, and a wool garment can be stretched and shaped when wet to fine-tune the fit. The more dense the wool, the less it will stretch, but all wool can be manipulated to some degree. A loosely-woven sweater jacket can be blocked to be several sizes larger or smaller depending on your needs. A tightly-woven wool jacket can usually be made a size larger by blocking.
Fill the sink with warm water and add two capfuls of baby shampoo.
Immerse the jacket in the water. Do not stir or agitate the water.
Soak the jacket for 15 minutes. Drain the sink and gently squeeze the water from the jacket. Fill the sink with cool water and soak the jacket for 15 minutes to rinse. Drain and squeeze the water from the jacket.
Try the wet jacket on. Pull the jacket out away from your body in the places you want to loosen up. If you want to loosen the fit of the entire garment, wear the jacket and periodically stretch your arms up and flap them around.
When the fit feels right, carefully remove the jacket and lay it on a blocking board. Stretch the jacket into shape and pin to the board with straight pins to keep the jacket in the shape you have chosen. Let air-dry overnight. Wear the newly loosened jacket as desired.