If you can, try tightening up the top and loosening up the bottome along with loosening the front. The pieces that go over the shoulders and under the belly should be as straight as possible. If you can't get it to fit, you may have a size that just isn't working for your dog. You may want to try an in between side (they make petite/small, medium/small, and medium/large). Of all the dogs that I've fit with easy walks, very few have the "perfect" chest and it takes some work to get a really good fit. It is certainly possible though.
ETA:
From the looks of it, I would try to go to a medium/small, or possibly even a medium. If you got it at a local store, can you bring your dog in a try on a few different sizes?
We abuse land because we regard it as a commodity belonging to us. When we see land as a community to which we belong, we may begin to use it with love and respect. - Leopold