At the main menu do the following:

1. Hold R1 + R2 then press Square, Triangle, Square, Triangle
2. Hold L1 + L2 then press right, up, right, up
3. Press L3 + R3 at the same time.

You will hear a sound to confirm code entry. This will unlock everybody but Hyuuga Hanabi and Yondaime (4th Hokage).