Now this is going to leave a pretty narrow space between the blocks, so if you want it a big larger, just cut your paper smaller. You could do 3 5/8 x 4 7/8 or even down to 3 1/2 x 4 3/4. I would still continue to cut it at 1 inch on each side (bottom, top, both sides). You want to play around with it and see how much space you like, so I'd recommend starting with scrap paper and laying it out before you cut the good stuff. :)
Once you've cut it at the 1 inch mark on all sides, you'll have this. Then the fun of putting it on the mat begins! lol The mat will be 4 x 5 1/4, so lay out your blocks and try to get them spaced evenly before you glue any of them down.
I hope that helps. I'm not a measure/cut person, I just cut and recut as I go, so I'm not the best person to hand out measurements. I tend to have a desk covered in little slivers of paper where I'm always trimming. :)