The recommended method of fixing a fork that has been cut to short is to replace it. This method used in this post has some limitations and may be beyond the scope of stresses of the steering system.
One of the most common occurrences with bike fit is adjusting the height of the handlebars. This is usually accomplished by the addition or removal of spacers beneath the stem. However, in some situations the cyclist may find his fork steerer is too short and they require an additional increase in height. The recommended method to solve this problem is by purchasing a new fork but this is not always possible.
One method to solve this problem is to use the compression bung as an extension of the fork steerer. This was originally developed when the famous £50 Look bike was purchased and had a fork that was too short. In that case, the bike was long out of production and used a now uncommon 1 inch diameter steerer.
This method uses a common OEM generic far eastern headset bung and compression assembly and replaces one part. This is available in various brand names including M Part, FSA and others
The diagram below shows the assembly within the contexts of the bike frame and a photograph of the extended steerer tube by approximately 20mm
A key point in this setup is to ensure there is a gap between the top cap and the yellow Modified Expansion Plug. The gap is required to ensure sufficient preload of the headset system.
One of the potential pitfalls of this is to ensure the fork has been cut squarely. Note the slight gap between the silver part (the extension) and the black part (the OE tube). This would need to be rectified.
Watch on YouTube
The video below shows the schematics and build up of this method
The video below shows the bung assembly in a live bike