1) Well, I don't know that shrinkage is NOT normal. Do you have 4a or 4b or 4a/b? Because if you do, you're going to have shrinkage, girl, that's what black hair does naturally if you don't manipulate it, use relaxers or heat. So, don't think of shrinkage as though there is something wrong with your hair. Ain't nothing wrong with nature.
Now, whether you like it or not is another matter.
2) After you have just removed the braids, your hair usually needs some TLC, so you're doing the right thing right now by deep conditioning. Make sure you follow with a rich moisturizing leave-in/hairdressing product.
3) If you were relaxed before putting the braids, you are dealing with 2 textures, and the new growth is going to feel unruly compared to the relaxed part. I think some of the ladies here who are stretching their relaxers use Sta soft fro on the new growth and seem to be happy with it. I have never tried it myself.
Edited to add: Never mind #3, I just read that you were natural. I'd recommend you add some oil to the shea butter that you're using. I add oil to every product I leave on my hair.
