I think this is a great question and a mighty (but very worthy) challenge for the Academy to try to find exceptional authors who write in small languages - out of the last 8 laureates, 4 (!!!) write (or, well, sing) in English, and I really don't think that 50% of great books today are written in English (not by far).
A good laureate might be Sjón who is from Iceland. He may still be a bit too young (b. 1962), but is already very respected, much translated and has won multiple important awards (including Nordic Council Literature Prize in 2005 for Blue Fox). Icelandic is, as you mention, a very small language (c. 300,000 speakers), but it might be easier for the Academy to inform themselves about Icelandic authors, given that the language is, despite many important differences, still somewhat close to Swedish, and since there is certainly a lively interest for Iceland in Sweden in general.