Well, take what I say as a last resort. Surely someone here has more experience than I.
From what I understand of XP, you cannot extend any volume that contains System, Boot, or Page volumes, which your C: drive is all of those things, using the standard disc manager, and that you will need 3rd party software to merge that unallocated space to C:.
However, I do believe that you can assign that unallocated space to a new partition/logical drive, and continue using it that way.
Some things that may help:
But again, don't use what I say unless you're desperate.
EDIT: Oh, and I should probably say to back up the drive if you can, just to be safe...
Edited by Rainbow Dash McStarley, 05 January 2014 - 06:29 AM.