PeteC,
My oldest son began shooting his bow when he was almost 5. He is now 7. His bow stacks at about 22" and shoots about 15# at 20 inches. At age 4 it didn't take him long to build up the form and strength to shoot it well, though his draw was short of 20". My 3-year-old son likes to shoot his big brother's bow and draws it only about half what his brother can, but it's plenty to get the arrow out to 5-7 yards with authority. My father built a shorter, stronger bow for my youngest, which he can only draw about 7-8 inches before he isn't strong enough to get more out of it. His big brother also can't get it all the way back. My guess is that it pulls about 25# at 16 inches. It doesn't stop my youngest from loving his bow.
Based on this singular experience, I would say that your bow should be fine as is. When your granddaughter is younger and can't draw it back all the way, it will be fine, and it will provide lots of growing room. If she really enjoys it, and the day comes when she needs a bigger, stronger bow... well you'll have the excuse you need to build another.
Enjoy it. Watching the little ones shoot is a blast!
Story Teller