That would be fine if you wanted to retain the legacy hashing function. I was describing a migration from one hashing algorithm to another. You're describing modifying the existing hashing algorithm, which is something different.
It depends if your goal is to have security for everyone right away or if it's to only use one hashing function. I don't see anything wrong with a round of SHA1 in your setup, especially when it allows you to secure everyone's password immediately...
