First question: Do you have your OS on that drive (my guess is yes), or would you be able to completely reformat it?
Second question: How many more partitions do you want? You only need "logical" partitions to go above three or four; perhaps you could use more simple partition.
Windows XP Disk Manager does not have the excellent "Shrink Partition" option that was added later. You will need a third-party tool that you will download from the net and build a boot disk from. Then you "shrink" the partition, leaving the free space on the right, and make a new partition in the freed-up data.
Another option is to do an image backup to another drive, reformat your drive, and restore the image backup.
IN ANY CASE: Do a complete backup of your system to an external drive so that you can recover if anything breaks. Have fun, and good luck.