Could I do this?

As a reader, I probably would not be interested unless the story is so utterly compelling that the short version leaves me hankering for more. Then again, there's the question of timing. If I read it and enjoyed it, would I want to read a longer version later? Not sure.

I suspect that the short story might be too long for a prologue (by the way, according to the posts I've read here, many just don't read prologues) so you might want to simply write your novel as a sequel or just as a new piece of work. Or spend more time on the short story and make it an epic novel.

I do not know what agents and publishers would think of your idea but that's my two cents' a a reader.

As a writer, I would suggest you write what works best for you. I wouldn't consider sales or marketing tactics at this point. Just write your best story ever. If that means the short story you have now, fine. If it means spending more time and effort on a solid nove, that's fine too.

IMHO.

When rights to the short story revert to you would vary from publication to publication. If you don't give away all (or critical) rights to the story, you should be all right. Reputable pubs will usually only ask for something like the classic "First American Serial Rights" or (with the online mags) something like exclusive rights to put up the story for six months, a year, etc.

If you really want to reuse the piece, make sure you thoroughly understand what you sell with it.