As far as I know, there are mainly two methods to shrink MKV video file size:
Method one: Compress MKV by converting MKV to MP4, AVI, 3GP or other video formats
In the same video quality situation, the MKV file size is much larger than other video formats like MP4. To shrink MKV without loss of video quality, we may convert MKV to MP4, 3GP, AVI and etc. If you do not want to change the video format, you may refer to Method two.
Method two: Shrink MKV by adjusting MKV video bit rate, resolution, frame rate etc
This method helps to resize MKV files to get a good balance of quality and file size. And you may choose to compress MKV as well as keep the MKV as the output video format. You may also choose to shrink and convert MKV to other video format.
Detailed guide at http://www.idealshare.net/video-converter/mkv-compressor.html