1- create an empty image using dd command
dd if=/dev/zero of=disk2.img count=5 bs=1G
this will create a file named disk2.img of size 5GB.
2- append this img to the existing img file of your xen vm. For instance, the name of my img file was disk.img
cat disk2.img >> disk.img
3- now you need to recreate the format
e2fsck -f disk.img
4-last step is to resize the img file using resize2fs. this will scan the img and looks for some changes happened and updates the filesystem table accordingly.
resize2fs disk.img
reboot your xen vm and use the command to get the available harddisk space. In ubuntu, use df -H to see the increased hard disk space.