Window of small size seen around Kentucky (8)
I believe the answer is:
skylight
'window' is the definition.
(I know that skylight is a type of window)
'of small size seen around kentucky' is the wordplay.
'of small size' becomes 'slight' (slight can mean small or slender).
'seen around' indicates putting letters inside.
'kentucky' becomes 'ky' (abbreviation).
'slight' placed around 'ky' is 'SKYLIGHT'.
(Other definitions for skylight that I've seen before include "Window in a roof or ceiling" , "Attic window" .)