I have a 5'-0" neice, and have visited this issue before.

Three solutions I have used in the past:

1. Clamp-on pedal extensions. See http://www.safety-industries.com/car_accessories.htm
for a set you can try for about $21. An obvious disadvantage is the time required to install and remove them whan you have multiple drivers.

2. Thick-soled shoes for driving. Lot's of vertically-challenged teen agers wear these in the part of the US where I live. One inch thick is not unusual. The advantage of these is no need to modify the car.

3. Seat-back cushions. You could have one custom-made to match your seat upholstery color and material for less than $100. Often, shorter persons find the seat too long for their upper legs; a back cushion solves this as well. The disadvantage of this approach is that it places the driver closer to the air bag.

A combination of #2 and #3 might be satisfactory.