All dropdown's backgrounds are with fixed size and can not be modified. This is needed in order to reduce the loading time by reducing the number of the rendered elements.
The solution to this specific issue is to create a new custom skin, which copies the skin you are using, and just resize the far right sprite in the file "ToolbarVerticalSprites.gif" without changing the original image size. More Information regarding skin customization is available in the following article: Create New Skin
the Telerik team