There are some differences between the US and Canadian requirements: I don't contemplate doing anything nefarious, so I put max size letters on both the wing underside and the tail. Here's an outtake from the regulations:
If the owner has marks both on the side AND on the bottom surface of the wings or fuselage (or cabin for helicopter), the following applies:
?the marks on the side must be at least 15 cm (5.9 inches); and
?the marks on the bottom surface must be at least 50 cm (19.68 inches).
If an owner decides not to display marks under the wings of the aeroplane or the bottom surface of the fuselage (or cabin in the case of a helicopter):
?then the marks on the side must be larger, i.e. they must be at least 30 cm (11.8 inches) except where the dimensions of the structure do not permit this. In that case the marks shall be as high as possible but never less than 15 cm (5.9 inches).
Now, there are experimental aircraft sporting letters smaller than code, but it depends on the knowledge level of the person approving...
John