Hey everyone.
I too have a iPhone 4, been using the spotify app for a while now and have experienced the dreaded 'low disk space' warning on the phone.
Currently spotify have not released an update for their app to allow you to refresh or delete the cache. Thus preventing you from gaining your memory back after removing the offline files.
BUT... I have found an answer.
Download a program called iphoneexplorer. They have released a new version called iexplorer but that doesn't seem to delete the folder.
Heres the link to the program:
http://iphone-explorer.en.softonic.co...
Install the program and follow this to find the folder you need to delete.
Double Click on your iphone, it will appear at the top of the windows.
Double Click on to Apps
Scroll down and double click onto Spotify
Double click onto Library
Right click Cache and click delete.
It may take a while and might appear to have frozen but bare with it and when its resumed, the capacity preview at the bottom will display the new amount used.
Its worked for me, hope it helps you!!