A predictive dialer would let you do exactly what you asked for.

An illustration:

Say you want to call Kimberly Clarkson.
1) On the dialer you press "5" for "k"

2) The dialer searches your contacts for entries with first or last names starting with "J", "K", or "L" placing any of the entries that have been recently called at the top of the list. (If Kimberly was the last person you called whose name started with a J, K, or L, you could tap her name and skip the remaining steps.)

3) You press "4" for "i"

4) The dialer cuts that list down to only the entries with first or last names beginning with "Jg", "Jh", "Ji", "Kg", "Kh", "Ki", "Lg", "Lh", or "Li". The list has become significantly smaller now, but still not all of it may fit on screen. However, again, if you've called Kim recently, or you don't have any contacts with a name starting with any of the above combinations, she should be at the top of the list in only two key presses.

5) If this is not the case, you enter another letter and the process repeats until you've typed enough of her name to have her show up on the list. (In my experience this never takes more than 3 or 4 presses, and since the bulk of my calls are to people I've called recently, only 1 or 2 presses are typically needed)