Due to behaviour changes, particularly in the Windows version of Lightroom, I’ve updated the instructions, which can now be found here.
Does your folder list look like this?
And would you actually prefer to see the folder hierarchy up to a higher level, like this?
Apart from the fact it looks nice and tidy, it makes it very easy to relink missing folders when you change hard drives, accidentally rename a parent folder outside of Lightroom, so forth. You only ever have to relink the highest level folder, and subfolders will update themselves.
[Edit – as per Jack’s comment below, make sure you have one unimported file temporarily somewhere in your pictures folder, otherwise Windows won’t show the Import dialog.]
Don’t worry, you don’t have to reimport your whole library. There’s a much easier way of showing Lightroom the parent folders.
First, go to File > Import. Select the highest level parent folder that you want Lightroom to see, and hit Choose.
In the next dialog, it looks like you’re going to import all of your photographs again. But tick Show Previews, and then hit Uncheck All so that all of the images are unticked. This will prevent Lightroom from importing the images themselves.
Finally, hit Import. A few seconds later, and Lightroom will show your folder hierarchy in the Folders panel.