Instead of focusing on whether you should lengthen the story, try to work out whether that will happen naturally as a result of whatever improvements your redraft mandates. For example:
- Are there characters or plot points that, if you're being honest, aren't nearly developed enough in the first draft?
- Is there a structural or format change that, although it would make the story longer, is worth doing for some much more important reason?
- Would a reader come away thinking the first draft is rushed?
If so, make sure you fix these problems during your revision and then see what word count you have when you're done. You might get a novel "accidentally". If on the other hand the story's needs don't mandate such an expansion, it's usually a bad idea to deliberately expand it with needless words.
If when you're done the story is novella length but you've decided it really should be a novel (e.g. for publishability), you could embed the existing story within another called a framing device. However, even if this creates enough new words to turn the work into a sufficiently long novel, it needs to be done well. For example, the relation between the two "layers" of the story might help you make some new points... or it might not. Only you can make that assessment.