Disney is currently in development on Penelope, identified as a musical comedy adaptation of the classic fairy tale The Princess and the Pea, from writer Robert Sudduth (Paramount+'s Grease: Rise of the Pink Ladies) and producer Will Gluck, who is also currently working to adapt The Aristocats as a live-action/CG hybrid release for the House of Mouse. It appears Penelope will be a live-action film, which will be developed with a theatrical release in mind, rather than going straight to Disney+. Besides the fact that it's based on The Princess and the Pea, any specifics are being withheld until the movie is a little further along in development.
Per Deadline, who first reported the project, original music for the film will be penned by singer/songwriter Ingrid Michaelson, as well as Broadway superstar Larry O'Keefe (Legally Blonde: The Musical, Heathers). Gluck is producing through his Olive Bridge banner.
The Princess and the Pea, originally published in 1835 by Hans Christian Andersen, centers on a young woman who might be able to marry a prince -- but only after she is subjected to a bizarre challenge. The prince, having struggled to find the perfect wife for years, finally devised a test by which he promises his family he will marry the first woman who can detect a pea placed under her mattress. The story is one of the few well-known classic fairy tales that Disney never adapted into one of their animated classics.
In his preface to the second volume of Tales and Stories (1863), Andersen claimed to have heard the story in his childhood, although it's likely he changed elements in translation. Academics have determined that the story was not a pre-existing story in his native Denmark, although there was a similar story, "Princess Who Lay on Seven Peas" ("Princessa' som lå' på sju ärter"), in Sweden, "which tells of an orphan girl who establishes her identity after a sympathetic helper (a cat or a dog) informs her that an object (a bean, a pea or a straw) had been placed under her mattress" (we're trusting Wikipedia on that one).
Besides Grease: Rise of the Pink Ladies, Sudduth's TV work includes Zoey's extraordinary Playlist. He has an upcoming feature film project called Tias, being produced with Eva Longoria's Unbelievable Entertainment for Universal. No director or star has been picked out yet, which is unsurprising considering that the project is in such early development.