The pot size looks fine to me. The soil would be better with some perlite or pumice in it (aquarium gravel, whatever you have), but I'd leave it alone at this point. The excess soil is not causing the roots to rot and die. The water pooling in the bottom (maybe?) or watering too often is what I would suspect first, if that's the problem. You can definitely make a pot that size work, you just have to water when the soil is going dry. It's only half full which is about what you want. Excess depth is where the danger lies, not excess width, really.
A very small 2 inch pot would mean the death of the plant, and probably sooner than later. How big is it? 8 inches or more?