Little peg, nearly hollow (5)
I believe the answer is:
teeny
'little' is the definition.
('teeny' can be similar in meaning to 'little')
'peg nearly hollow' is the wordplay.
'peg' becomes 'tee' (tee is a kind of peg**).
'hollow' says to hollow out the word (remove centre letters).
'nearly' with its centre removed is 'ny'.
'tee'+'ny'='TEENY'
(Other definitions for teeny that I've seen before include "Minute" , "Very small (informal)" , "Informally very small" , "Microscopic" , "Wee" .)