The earliest known record of this proverb in literature can be found in William Camden's Remains Concerning Britain (1605):

An ynche in a misse is as good as an ell.

A 1655 quote from Thomas Fuller illustrates the lengthy syntax of the proverb's original structure:

An hairs breadth fixed by a divine finger, shall prove as effectuall a separation from danger as a miles distance.

By the late 18th Century the proverb had been abridged to its current form.

Contrast Half a loaf is better than none.