He'll be fine. He probably does think he's a big dog. Most Yorkies do. I sometimes find it helpful to kneel down when Tea starts doing that, and put my hand under her chin, and say a firm, "Stop." That gets me down to her level rather than the, "SHHHHH," from almost six feet over her head. It also allows me to redirect her attention. You might try doing that, and just gently putting your hand under his chin and making sure he's looking at you. I don't mean snap his head around a give him a whiplash. It's kind of like with a child when you have to make sure their attention is focused on you.
Remember you're dealing with a two-year-old child mentality right now. You probably don't remember it, but I bet you were a terror at two years old. I know I was