As noted by DoubleAA in a comment, the reason you mentioned in your question is found in Bava Batra 14b:
וליכתביה לחודיה וליקדמיה איידי דזוטר מירכס
But let it [Hosea] be written separately and let it precede it [Isaiah]? Since it is small it would be lost.
As to your objection from the small size of Ruth, Shitah Mekubetzet ad loc. addresses this point:
אף על גב דרות וכל חמש מגלות הם קטנים שאני הכא משום דאנשי כנסת הגדולה כתבו אותו חברו כל הקטנים יחד. עד כאן תוספי הרא"ש ז"ל.
Although Ruth and all of the five megillot are small, this case [of Trei Asar] is different. Since the Men of the Great Assembly wrote it, they joined all the small books together. (This is from Tosfei HaRosh.)
So, according to Shitah Mekubetzet, the twelve prophets are joined together because they are small and were all transcribed by the Men of the Great Assembly.
Alternatively (and with a hat-tip to Double AA), Ibn Ezra on Tzephaniah 3:20 explains that the Trei Asar are joined together as they are of small size and are thematically linked, in that they are forward-looking prophecies, in contrast to the five megillot.