It's almost always futile trying to change someone's psychological makeup. Whatever that problem may be. "Don't be afraid of snakes! (or water, crowded spaces, heights, etc.)" "Don't feel you're too short (too fat, too dumb. . . too small)." "Don't be timid (or aggressive, sensitive, paranoid, etc.)"
Who you are is a result of a lot of things, both hereditary (genetic: small cock) and environmental (experiences that determine how you deal with that). The mix is different for all of us.
I'm hung like a chipmunk. I've had a killer love life. I credit that to several counter-balancing genetic factors (like good looks and athleticism) and a supportive environment (loving parents, success in sports and social success). In high school and college I was a really good athlete (mainly football). BMOC. I credit this as the basis for a lot of my confidence. Long before I hit puberty I already felt good about myself. This helped me deal with a lot of the insecurities that later came with having a small dick. Also being great at eating pussy helps!
I've also developed a philosophy. I feel we each determine how things affect us. I myself choose whether to let something bother me or to let it roll off my shoulders like water. Now that isn't something which comes to us instantly. It takes a lot of practice. And I find myself slipping occasionally. But, usually, I catch myself after a bit and say, "You're just making yourself miserable. Move on."
So, first off, you can start working on how you deal with things in your life. Find ways to bolster your confidence. As Johnny Mercer said, "Accentuate the positive, eliminate the negative." I know I'm good at many things, good-looking, and people like me. (Plus, I've got a gorgeous wife!) I'm sure you can find similar positive things about yourself. Concentrate on those and not the size of your cock. (BTW, you have a good-looking cock!)
You can also put a positive spin on things. I'm not saying to go full-blown SPH, but being turned on by having a small cock puts things in a whole new light. It's hot having other guys see me naked at the gym and seeing how women react to my size during sex. Frankly, even though I admit a small cock isn't the greatest in sex and (secretly) think big cocks are the epitome of masculinity, I wouldn't change my small one for anything in the world. It's just too much a part of who I am and how I enjoy sex.