The most common and most likely answer to this crossword clue is the 4 letter word OXON
I've seen this crossword clue in Financial Times
O
X
O
N
Buddy explains!
The straight part
We know that "Small shire" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case small shire = oxon.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does OXON mean?
OXON noun- Any organic compound derived from another in which a phosphorus-sulfur bond in the parent has been replaced by a phosphorus-oxygen bond in the derivative.