This document summarizes an approximation algorithm for real-time disparity estimation of stereo images. The algorithm shrinks the left and right images 3 times to reduce computational time and search area. Disparity is estimated from the shrunk images and then extrapolated to reconstruct the original disparity image. Experimental results on standard stereo images show the algorithm reduces computational time by 76.34% compared to traditional window-based methods, with acceptable accuracy. Some accuracy is lost due to pixel quantization during shrinking and extrapolation, but the fast estimation of dense disparity makes the algorithm useful for applications requiring real-time performance.