Yes higher dielectric material, e>1, which is everything except air, shortens lambda length. Effect of this can be seen in a cellphone. Bigger structures such as PCB, display and battery all effect total antenna impedance due to its dielectric constant, when these parts are a part of antenna structure.
Ceramic antenna structures with e above 30-40 can radically reduce antenna PCB footprint at cost of bandwidth. There are also some other antenna structures that can be made resonant at sizes much less then 0.5 lambda, such as small loop antennas and antennas with a ferrite core.
In general, reducing antenna size with or without high dielectric material is at cost of bandwidth and/or efficiency. Narrow bandwidth is sometimes not a problem, such as for GPS and even BT and if wider bandwidth is needed can active tuning be used.
Smallest possible embedded antenna for a certain performance is often a question about a total design concept. Is PCB groundplane stable and big enough to be used as part of the antenna, can resulting RF ground-current cause interference with low frequency signals, available amount of antenna volume, what shape do it have, what material will enclosure have, handheld, directivity..
TS asked how to calculate miniaturization factor for an antenna. Length is a obvious factor which have been given examples for a short dipole but antenna miniaturization factor is not only in terms of length. Needed volume for antenna structure and needed volume around antenna that must be free for a certain performance is in a real design that should be compact is just as important but parameters and needed calculations are way to complex to describe in few simple lines. Can recommend a lot of heavy books if TS really want to learn about such parameters.
If designing commercial embedded antennas is cost a main miniaturization factor for how small antenna to design. Cost comes in a lot of shapes.
Main cost is antenna volume, I do not understand why but design department says that when all other electronic components becomes more compact with better performance for each year, must that include antenna.
Active tuning cost increased complexity and cost for added components. Using high dielectric ceramic material adds cost of weight and money. Flexfilm antennas adds cost for carriers and connectors. Often is it a bit opposite, small sized material cost more money then big structures.
Another miniaturization factor is total size, not of antenna, but of final product. An antenna is seldom a stand alone product.
A common design mistake is to not leave enough space for antenna in a small TX something and maybe due to too small space get a resulting antenna efficiency below 10%. For a expected coverage must then TX power be increased and for not loosing battery lifetime due to increased TX power, must battery size be bigger and heavier. This poor performing antennaa will cost more development time as every tenth of a dB must be found to make product as acceptable as possible.
Leaving bigger space for antenna can result in a total smaller, less heavy and less power hungry product.
However almost always is antenna something included late in design phase, "Oh yes, we have forgot an antenna, but there is a small space where nothing else fit. Tell antenna-guy to design a top performing antenna in that shape".
So it is design department that invent small antennas. As antenna-guy you only have to fill that space with something.