My DD was a very cautious child who did not like new things. I talked her into riding when she was 8- the preshow made her a bit uncomfortable, but the drops did her in. Poor little thing- I can still see her panic-stricken face as the drops kept on and on and on... She didn't trust my opinions about any other rides or attractions for about 2 years. She is 15 now, and loves every WDW thrill ride, but still doesn't enjoy TOT.
If you think your little one will be fine with darkness, spooky atmosphere, the ghost story, and the drops, go for it. Be prepared, though- lots of kids that are good to go before getting to the park get intimidated when they see that tall spooky building and hear the screams coming from it.