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Newbie with question. Please help someone

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Ok, let me try to explain this as simply as I can in step by step fashion. I am new at this and not that technical so please understand.
1. In 2007, I purchased True image 9.
2. I then backed up my entire internal 120GB HDD to an external HDD.
3. I am running windows XP professional.
4. A year later, my 120GB internal HDD crashed.
5. I went to walmart and purchased a 500GB western digital internal HDD.
6. After installing this new drive, I did a full restore from the backup I made.
7. All went ok and I got back up and running quickly.
8. Here is my question/problem. When I open my computer and right click on the C drive and select properties, it shows only 120GB capacity and not the new 500GB capacity of the new drive. I am totally confused and clueless as to how to even go about repairing this. Soon, I will not be able to install any new software because my computer thinks I am running out of space on my C drive. The acronis software shows the correct capacity but it says most of the this space is used which is wrong also. Even the bios shows this drive as being 500GB in capacity. Is there anyway to fix this and still leave all my data intact. Thanks.

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This is easy to fix.
Right click on the My Computer icon that is on your desktop. Choose manage. Open the storage > disk management console.
You will see your disk there. You will see there is probably a big grey area that says unallocated to the right of your last partition.
You have the choice to extend the last partition to occupy the unallocated space and/or you can create a new partition.
To extend the partition, right click on it and choose extend. To create a new partition, right click on the unallocated space and choose create partition, then assign a drive letter.

If the unallocated space is not where you want, you can install the AESUS partition manager and adjust easily.

ALternatively, you can boot on a XP recovery CD, launch a command prompt, and use the DISKPART command to manipulate your partitions.