If you were starting with much higher quality source material, I’d say go ahead but with VHS (in my opinion), the quality will suck.
My bitrate calc says a CBR of 3700 or a VBR of 6600, 3700, 2200.
Try doing a short (5 min.) clip with these settings and see what you think. You may find it acceptable.
If you don’t have a dual layer burner, you could try splitting it over 2 discs to maximize quality.
This way I get a CBR of 7700 or a VBR of 8000, 7700, 3800.
Either way, do a 2-pass encode to help clean things up.