I imagine you’re wanting instead something the size of a hat, but smaller fMRI are certainly in development, for example [0] with discussion about the size at [1].

[0] https://med.umn.edu/news/university-minnesota-developing-com...

[1] https://designawards.core77.com/Strategy-Research/95329/A-ne...

The participants end up looking a bit like Toad from Mariokart.

How realistic would it be to make a smaller device?

Patients should get a "My other hat is a superconducting quantum interferometer" hat.