External power supply design (12V to 5V and 3.3V) for arduino based system
Like Scott Seidman already said in his comment you can use a switching regulator. But i would suggest to replace the 7805 with the regulator. You could use for example the LM2575. This one comes in your preffered TO220 package, too.

Another sideeffect is that your circuit wouldn't consume as much power as it does right now, because the power won't go into heat anymore.

Edit: Altered my answer according to FiddlyOhm's comment. I researched too less, sorry for that. My intention was to say that you don't neet a fixed voltage regulator anymore if you have an switching regulator like the PT5101. I hope it is more clear now.