How physically small encoders with high resolution are available?

How small, physically, can I get a high resolution encoder? I have a manual slide application that I need to measure the movements precisely. There will be no stepper or servo in this application but the smaller the encoder the better. It will be manually adjusted by hand. If the slide moves 0.02” I need an Arduino to pick up on that movement at a minimum.

Thanks for any advice.

The AS5047P are nice and small.