Contracted soldiers avoided losing king (7)
I believe the answer is:
reduced
'contracted' is the definition.
('reduce' can be a synonym of 'contract')
'soldiers avoided losing king' is the wordplay.
'soldiers' becomes 'RE' (Royal Engineers).
'avoided' becomes 'ducked' (duck can mean to avoid).
'losing' suggests deleting specific letters.
'king' becomes 'K' (abbreviation for king in chess).
'ducked' with 'k' taken out is 'duced'.
're'+'duced'='REDUCED'
(Other definitions for reduced that I've seen before include "brought down" , "Decreased, cut down" , "Curtailed" , "Made less in size etc" , "looked smaller" .)