With supervision, yes. If not, I wouldn't because I'm afraid that he might put it in mouth. How old is your daughter? If she's old enough to help supervise and tell your son "no", then maybe it's okay to let them play with the play-doh together. Your daughter can practise being a big sister and your son can play with the toy he loves. Win-win! But of course, best if you're in the vicinity just in case something happens :)
Is your two-year old still putting things into his mouth? Is he able to follow instructions (when you say “no”)? If he is able to comply to instructions from you discouraging him from putting the dough into his mouth, it shouldn’t be a problem. You can also try making your own play dough (http://babyparenting.about.com/cs/activities/a/playdough.htm) and supervise his play sessions.
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It's okay. As long as it's under supervision. i let my year old baby play too. Playdoh is good for their motor skills.