Yes, the soil compacts as the organic components of it break down. If it's rather pot bound and needs more soil, you should add it to the bottom. While peppers could probably tolerate being buried like their tomato cousins, I would be concerned about rotting the stem. It should be simple to pop it out if it's pot bound, add the required amount of fresh potting media to the bottom, and pop it back in. Whether or not you need an entirely new, larger pot is up to you, a bigger pot will yield a bigger plant, which may or may not be a good thing depending upon your circumstances.

If you've had them for 2 years in the same pot, then I'd say it's high time for a complete repot. You didn't say where you live, so I'm not sure how soon your growing season is over. Conceivably you could add soil to the bottom for now, and repot completely early next spring. This would entail pruning off flimsy growth on the top, washing out all the soil from the roots, and reducing the root system by half or more.

Peppers do really well with severe root pruning, despite how scary it looks. I recently repotted a five year old "ornamental" hot pepper in June and really went to town on the roots... it responded with ecstatic growth and is already setting another crop.

Yes, a lot of us in the North forget that peppers aren't really a soft, herbaceous plant, but actually become a woody sub-shrub or shrub in their native haunts depending upon the species.

I've seen some of the very small leaved ornamental peppers and also the wild "chiltepin" pepper done as bonsai, and it was most effective.

Okay, thanks for the advice everyone. I'll look into a repot of the plant and also pruning the roots. Maybe that'll encourage an even larger plant next growing season. Thanks again GW.

can you keep bell peppers for several years? I have never heard of anyone doing this, but the idea is really exciting! I would assume it would involve bringing them inside for the winter?

Captive,

Yes you can keep them for several years. They need to be brought in, and provided supplemental light. Fluorescents will do to keep them alive, but if you want them to continue to produce fruits you will need very intense (HID) lighting. But if you just want to overwinter them, some supplemental fluorescents will do. They can also be pruned back quite heavily.

I believe they are known to live 40 plus years in their native environments.

40 years! I am constantly learning new things from GW!

"I am constantly learning new things from GW!"

I agree. I have learned so much on GW.

Thanks Everyone!