Be sure to keep the stair width as is, if less than 36" finished: http://publicecodes.citation.com/icod/irc/2009/icod_irc_2009_3_sec011_par006.htm
Is there room next to them for a short raked wall? Nail the bottom plate down, add the studs- rough cut- to a little higher than the tread/riser tops, nailed to the stringers. Then lay a 2x4 on the tread nosings, draw the line on each stud, cut the studs (on the rake= +3" above the nosing), add the top plate, leaving room for the newal post at top and bottom. The height will be perfect for the wood pickets/rail on top the trimmed, drywalled, pony-wall.