I am a PhD graduate applying for teaching (assistant professor) positions at smaller liberal arts colleges. I understand that generally cover letters should not exceed 1 page, especially when applying to large research universities. However, are longer letters acceptable when applying to smaller schools? Again, the job posting requests that statements of teaching philosophy and research interests be included directly in the letter. If more than 1 page is ok, how long is appropriate?
For readability, it is certainly preferable to append.
If you feel your cover letter is a little skimpy, I suppose you might put something autobiographical in the cover letter, that was perhaps a little to personal for the actual statement. For example, "my teaching philosophy was largely developed during my year as a VISTA volunteer teaching in ...." (That's just an example -- your situation could be completely different.)
The cover letter is a good place to tie the threads together of the various portions of your application, to show yourself as a whole person, to project your personable qualities, and to get the reader interested in learning more about you.
I think you're right to keep it to one page.
You should follow the directions on the job ad. This is even more crucial at smaller schools, which often feel that applicants treat their applications as a "backup" and ignore their requests.
In my field, most cover letters are 1.5 to 2 pages. They include 1-2 paragraphs on teaching and 1-2 paragraphs on research. These will be the highlights of your statements. At a teaching-intensive school like a liberal arts college, you would discuss the teaching first. You should also have a paragraph somewhere which states why you are especially interested in their school. This paragraph should demonstrate that you understand their student body. I think you should aim for 2 pages here, given the requests.
In this case, I would not append your full statements. This is not following the directions and will irritate the readers. Perhaps you could consider mentioning in your closing paragraph that your full teaching and research statement are available on your website. If you are contacted for a first round interview (or have other communication with the hiring committee), you could also offer to send your full statements via email at that time.