Thats a great idea, you can even sit your basket on the lower charcoal grate and just wrap the grate in tin foil to create a flange.
I have my Kettle tucked away in my shed right now but I will get measurements for you(distance from the lower charcoal grate to the higher grill grate) once I break it out for the year. If I had to venture a guess for the distance I would say its about 8-9 inches. The lower charcoal grate is 19 inches in diameter.
A suggestion, could you make the lid of your fire basket upside down? This way it would catch the drippings for easy clean up instead of allowing it to drip all over the kettle.