The first thing that comes to mind is a revolver such as a Python or S&W 27. You can still find new revolvers that are no longer in production at places such as Fugate's (they advertise here). These would be somewhat largish for him, but they are heirloom quality. Otherwise, a steel J-frame .357 would do nicely. Take a look at the S&W 60 Pro Series, which is an impressive smaller revolver that should fit your requirements well.
I would also stay away from poly semi's as well. The nice metal ones are over your price range, but a good 1911 from Springfield or Kimber or Colt would do fine. Since they come in so many different sizes and calibers, I'm sure you can find something that suits you. One that comes to immediately to mind is the Springfield EMP, which is 9mm and fairly small. It would cost about $75 over your budget if you order it from Bud's Gun Shop, but what's an extra $75 when you are already looking at a grand?
Some others to consider are a Sig 232 or Walther PPK/s. They will have a bit of kick to them, but they will most likely fit. Be aware that ammo could be very hard to get right now. Another choice is the Kahr MK9. It is a jewel of a small handgun with a trigger that becomes unbelieveably good over time.
If you would consider at least one used handgun, take a look at the H&K P7PSP. These are definitely heirloom quality. There is however the potential problem of hand size being to small to wrap around the grip well enough to cock it.