Neil Gaiman's most recent novel started out as a short story that got longer and longer the more he worked on it. He says he ended up "accidentally writing a novel" (which I think is hilarious, because I can't even write one on purpose). So it's definitely possible for an idea that starts out as a short story to turn into a novel.
If you've read it, you'll notice a few things. There are only a handful of important characters, there is only one major plot, and the subplots (if you can call them that) mostly exist to provide context and atmosphere. Furthermore, Gaiman's writing style is quite direct. He doesn't use particularly flowery language, and he doesn't draw out scenes for longer than necessary.
So your first impulses (add more characters, subplots, make scenes longer) are not necessarily what you need to do. They might help, but they aren't obligatory.
Another thing you might notice in older novels is the tendency to forgo one cohesive narrative in favor of a more episodic format (it seems to have fallen out of fashion recently). In particular, I'm thinking of several examples from children's fiction (the Alice books, The Wind in the Willows, etc.). This might be something to consider, especially as your story draws inspiration from Sleeping Beauty. It could be a fun exercise to study the structure of folk tales to see if you can use that to motivate a new approach.