1. Using Regedit, open the key below, if the Network sub-key does not already exist then create it. 

2. Add a new REG_BINARY value of 'MinPwdLen', and set the data to the minimum number of characters required for a password to be accepted. 

Note: This does not affect existing passwords, only new or changed. 

Key:[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Policies\Network]
Value Name: MinPwdLen
Data Type: REG_BINARY