I was just at the same place in the book, and before introduction of the start-over function, I came up with this:

(defun correct ()
  (setf *small* 1)
  (setf *big* 100)
  "Hooray!")

So I tell the program when it's ready to start over, so I can call (guess-my-number) only if I want a new game. I also used setf as those variables where already defined. It didn't even occur to me that I could use defparameter again.