The first question is whether you really need to enlarge it. If you are planning on using a standard Tele jack cup or an Electrosocket part, yep, you do - but if you are planning on a square or football jackplate, you don't need to worry.
Now, that question out of the way -
If you have access to a drill press and appropriate clamping gear, you just clamp the body in place with appropriate padding, and use a 7/8" Forstner bit to bore the hole out.
If you do not, another way to approach this would be to apply masking tape to the area you need enlarged and scribe the tape with the 7/8" diameter circle you want. If you have access to a woodworking vise, clamp the body on place to make it easier to work on; but if you don't, you can still proceed, it will just be a bigger pain. Now: Trim away tape over the existing hole, and then wrap 80-grit sandpaper around a length of 1/2" or 5/8" dowel. DO NOT HURRY THIS PART - sand your way out to the line, a little at a time. Make sure you are sanding parallel to the hole sides and not at an angle. The last thing you want is to chew up the sides of your hole beyond the 7/8" circle, and end up with bare wood or a gap that your jack plate won't cover.
Best of luck -
Bagman