There is a children’s story called Die kleine Raupe Nimmersatt. I know that this is translated from The Very Hungry Caterpillar.
But trying to retranslate this directly, Die kleine Raupe Nimmersatt becomes The little caterpillar Hungry.
To be precise, "Die kleine Raupe Nimmersatt" doesn't translate to "The very hungry caterpillar". The English title is the original one, and the German one is a translation.
I'd say the translator allowed himself a certain degree of freedom, as it is common in literature. "Nimmersatt" is a nice word to express "very hungry" very concisely. In fact, it goes beyond "very hungry" and says "never satisfied", that is always hungry. The effect is augmented by using it as a name and not a simple adjective. As such, it has to come after "Raupe". "Die Raupe Nimmersatt", however, might sound a bit incomplete. By introducing "kleine", which has no direct equivalent in the English version, the translator could round it up and also match the rhythm of the original title.
Of course, most of this is interpretation. You'd need to ask the translator (or the publisher?) for a definite answer to "why?".
I assume that the title was changed for purely poetic reasons. The original English title has a regular meter (unstressed, stressed, unstressed, stressed, ...), but the literal translation into German "Die sehr hungrige Raupe" does not. By choosing the less literal translation "Die kleine Raupe Nimmersatt" (i.e, "the little caterpillar Always-Hungry"), it was possible to preserve the original meter. It just sounds nicer, that's probably the entire reason.
The trick is in the word Nimmersatt, which translates to "always hungry"; but in this case is also the name of the caterpillar.
Klein, of course, means small and is the adjective to Raupe. The German title doesn't use or need the very, because that's implicitly in the name of Nimmersatt.
Your translation "The little caterpillar Hungry" is literally correct. It could be extended to "The little caterpillar Alwaysveryhungry" to be even more close to the meaning of the German, but that is no longer really English.
