I would go with the contention that the circuit should be of a size where you can do a glide approach and land on the runway.
This was demonstrated to me on Friday quite dramatically. I was out on a nav flight with my instructor and was down at YMUL doing some circuits. I lapsed a bit and went out on a rather wide circuit. My instructor pulled power and there was no way in heaven I could have reached the runway. On the next circuit I was tight enough to get in on a glide approach without any problems.
