Sure. This is basically the goal of the Gaia Hypothesis (or at least where Lovelock started), and while I disagree with much of what Lovelock said I do agree that an unstable atmosphere (meaning that over time the atmosphere would change, and must be maintaned somehow) is pretty good evidence for life. If we're talking Earth-like life the presence of large amounts of oxygen would pretty much be proof (it likes to bond with things). A lack of oxygen isn't DISproof, but it'd be proof. And an unstable atmosphere is easy enough to detect--we look at the composition of atmospheres already.But, on Earth at least, it took a really long time before that initial life became large enough to be seen without a microscope. So if the planet in question was teeming with bacterial life, could we detect that?
It's not the size of hte organisms, but their influence on their environment. And honestly, single-celled beasties are better at influencing the environment than we large things are (you could cut down a significant portion of the trees without altering O2 levels too much, but if you get rid of phytoplankton you shut down the biosphere, for example). Simply put, there's a LOT more of them than there are of us.