Not enough space between brake pads

[Pete7874]

I am installing new pads. After I place both of them inside the caliper, they are pretty much touching each other and there is absolutely no space to squeeze the disc in-between them. I am guessing the caliper cylinder has contracted. How do I make space for the disc?

The manual says not to touch the brake lever while the pads are out, and I followed that. Do I need to release some brake fluid through the air bleeder valve the make the caliper expand?

Thanks.