Yes, the "Fashion Capital of the World" has plenty of options for the vertically challenged! Aside from the go-to chains, there are several boutiques I've found where clothing consistently runs small, or that provide free alterations. Will likely add more soon.
ChainsBanana Republic: There are several throughout the city, but the store with the most extensive petites section is on 34th Street near Fifth Avenue, across from the Empire State Building. In fact, I think it was the first one to actually offer petite sizes in the store.
Ann Taylor/Ann Taylor LOFT: The flagship AT at 645 Madison Ave. is definitely the best. There's also a big, flashy LOFT in Times Square (1459 Broadway), but it can get very busy, and they don't necessarily have anything more to offer in terms of selection than the other stores. Head over to the one at 42 Street and Lexington Avenue for a calmer shopping experience.
Nordstrom Rack: At Union Square, 60 East 14th Street. Good selection of size 4-5 shoes. (If you really wanted, you could also head to 1150 2nd Avenue to pay homage to the dearly departed Giordano's, which was dedicated to small-size shoes, as AN noted in
this post.)
BoutiquesBaby Blue Line: At 238 Mott Street, in the Nolita neighborhood, which is a great place to browse, anyway. Trendy, but still classic, and cut very small. If you're there on a weekend, check out the Young Designers Market at 268 Mulberry Street, which sometimes has great designers just starting out (and also jewelry and other handmade accessories).
James Coviello: Small boutique at 70 Orchard Street on the Lower East Side, also a great browsing neighborhood near Chinatown. The designer, James (who is often there) doesn't cater to petites, but he has a classic style that is almost universally flattering. The real bonus is that they'll alter anything you buy for no extra cost! Clothing is pricey, but there are decent end-of-season sales.
Huminksa: Boutique in the East Village. Pricey, but dresses are very classic, with great material.