Is the model for small signal right?
Only for high frequencies.

A capacitor behaves as a short circuit only for high frequencies ("high" being defined in relation to the capacitance value and the values of resistors in the circuit).

If you want a small-signal model for low frequencies, you might replace the capacitor with an open circuit instead. 

When you learn phasor analysis, you will learn how to find the reactance of the capacitor, which will let you make a small-signal model of a circuit with a capacitor that can be used at any frequency.