Steroids dont shrink the penis but estrogen does.
The below is from a sex change clinic,it's from Bangkok Thailand
You must be on hormone therapy for
6 months before surgery.
Male to female transsexuals use the hormone estrogen to feminize their voices, faces, and body characteristics. This hormone changes their fat distribution, increases their breast size, and decreases their body hair. One thing that this hormone does not do, however, is to eliminate facial hair. Estrogen also shrinks the penis and testicles. Any medical doctor, including a psychiatrist, can prescribe hormones once they determine that their patient is suitable for them.
http://www.ramhospital.com/GenderReassignmentClinic.htm
Estrogen also shrinks the penis and testicles, so the decision to go through with hormones is a fairly permanent one (though nowhere nearly as extreme as surgery).
http://www.soyouwanna.com/site/syws/...hangeFULL.html
If you want more info on this contact a liscensed professional doctor about sex change and effects of estrogen on the penis