1. It is good we looked because that so-called recovery partition is your active boot partition containing the bootmgr. You first have to move the bootmgr to C, else your system becomes unbootable.
http://www.sevenforums.com/tutorials/209885-bootmgr-move-c-easybcd.html
Apart from the bootmgr, this partition seems to be completely empty. Is that correct. Open it and have a look.
2. Once you moved the bootmgr, you will have to delete that partition and volume to gain unallocated space. For that it is best to use the bootable CD of Partition Wizard (the .iso is in the last item on the website). Burn that to CD and boot with that CD.
Free download Magic Partition Manager Software, partition magic alternative, free partition magic, partition magic Windows 7 and server partition software - Partition Wizard Online
Here is a tutorial on how to go about it.
Delete Partition - Partition Wizard Help Video
3. Next you'll have to make an image of your C drive to an external disk - this is to be on the safe side. Here is how:
http://www.sevenforums.com/tutorials/73828-imaging-free-macrium.html?ltr=I
4. Then you download the Macrium recovery .iso from my Skydrive. Burn that also to CD to have it handy in case something happens during the next step. You can also use that CD to make the image. Then you don't have to install Macrium.
https://skydrive.live.com/?cid=475a0a48ca6d4035&provision=1&ref=3&wa=wsignin1.0&sa=412485191#cid=475A0A48CA6D4035&id=475A0A48CA6D4035%211812
5. Now you can use the Partition Wizard CD and extend your partition. Here is how:
How to extend partition easily with partition magic ? Partition Wizard video help.
Let us know when you encounter any problems or when you are done.