Right now i'm playing a 4/4 sized violin and i recently switched teachers and she said that 3/4 size violin would fit be better, because my fingers are so small that i can't reach high enough to hit the right notes.. so what should i do? Would it be better if get a 3/4 size violin because i have small hands? but i think its too late now..

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Also it i have to stretch really hard so my 4th finger can hit the right note.. if i do change from 4/4 to 3/4 is there going to be a difference in sound??

There are actually quite a few aspects you might want to consider before making this decision. I don't know how old you are or if you are still growing..so I'll generalize. Children start on smaller violins, however, generally adults all use a full size violin, regardless of how big they are. That is to get the full violin sound...however I have heard of small violinist having 7/8 violins made, so they could get the full sound, yet still have the smaller violin.

I'm 17 so i doubt my hands are growing and i've been playing for 1 yr or so. The violin i got right now cost me about $550 and it sounds pretty nice.. so i think its abit late to change to a 3/4 violin..
I never heard of 7/8 violins before.. do they sell them at stores?

I've never seen one in a store. I've seen them in books available for order...

my opinion is that you will get used to the bigger size and it will begin to feel fine after you have played it for awhile. i too have TINY hands. i just do stretches so my finger will reach the highest point on the finger board. i would fiddle (no pun intended) around with the 4/4 size and if after awhile it isn't working out and doesn't feel comfortable to play, then i would move down to the 3/4 size.