I'm no expert, but here goes...
I cant really give much criticism about the sprite itself.
The animation isn't very smooth. Is it walking/hopping? Do you have a frame restriction?
Here's something you could do if you don't:
it's not a very good animation, I know. It's actually terrible. I'm just trying to point out that your animation looks very stiff and unnatural. Yup, basically fixing that problem means redrawing each frame, or taking time modifying it, but it's worth it.
Is your light source meant to be coming from the top right or the right? Surely the big head would cast a shadow on the rest of the body? Especially mid-hop, where it falls over in front of the eye. Right now it just looks like a shifting painting. Bring it to life!
Anyway, it's a nice character. I would be surprised if a 1up mushroom started runnin at me
