Why did the Caterpillar think Alice was the right size?

The caterpillar thinks Alice is the "right size" because she is the same size he is!

‘Well, I should like to be a little larger, sir, if you wouldn’t mind,’ said Alice: ‘three inches is such a wretched height to be.’
‘It is a very good height indeed!’ said the Caterpillar angrily, rearing itself upright as it spoke (it was exactly three inches high).