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"much diminished" is correct and usable in written English.
You can use it to describe a decrease in size, quality, or importance. For example: The company's profits have been much diminished since the global economic crisis.
Exact(50)
Life was much diminished".
Betty was "much diminished" towards the end.
Frank's confidence in Levin, already much diminished, failed altogether.
It is still playable, Dr. Blue said, but much diminished.
His influence would have been much diminished in any case.
These days, the city's reputation for naughtiness has pretty much diminished.
Similar(8)
But no sitting Presidents returned to the much-diminished game.
Morgan Stanley emerged from the crash a much-diminished institution.
Opec's glory days are long in the past and it is a much-diminished force.
But since 2001, it has failed even to live up to this much-diminished potential.
There might be a much-diminished nucleus or just a swarm of icy debris.
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com