I am trying to make a hobbit but not really sure whats the best way of doing it. How would you proceed making the hairy feets? and their curly hairs.. using blender? 

Different possibilities:
There are some morphs and textures to be found at ShareCG: LINK1, 2 and 3).
Otherwise, you could also use static mesh hair for the feet: LINK

Meriadoc Brandybuck (texture from Link 2)

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Allright, thank you very much! I will try this different solutions.