it should work but if you can go t-case and ring & pinion gears you will get a better combo.
My '87 had 5.12 gears and stock t-case with 31" tires for awhile.
I was turning 4200rpm at 65mph with a low range crawl ratio of 42:1
This had my speedo off by about 10mph and the odo was off too.
Now I am running 4.30 gears and a 6.4 t-case with 31" tires.
I am turning 4100rpm at 65mph with a low range crawl ratio of 100:1
Speedo / Odo are almost spot on.
Here is a good calculator for figuring speed/rpm/crawl ratio/ ect....
Keep in mind that your tires may not be the size advertised on the sidewall.
http://www.grimmjeeper.com/gears.html