The game’s font scale is set to Medium by default, but when you change it to Small, item/spell tooltips become more readable. Clearly, this won’t work for everyone. If you have a small screen or your vision isn’t what it used to be, you may prefer to increase the font size instead.
You can adjust your font scale settings under Options > Graphics > Font Scale.
For comparison, here we have the same item side by side with the font set to Small and Medium, respectively. If you feel like tooltips occupy too much of your screen, you should try fiddling around with the font size.
