Yes.I'm not sure what you mean by one or two inches above the feed to the C/H system.
Do you mean one or two inches above the outlet pipe on the F & E tank, so the f & E Tank should be near empty?
Once the CH is filled up, there should not be any more need for water - unlike the Tank which supplies cold water to the HW cylinder and the toilets etc. The level need to be high enough to stop air getting into the system but not too high, as the level will rise as the water in the system heats up and expands.
It's the distance between the water level when cold and the overflow which is important. If it is too small the water will expand on heating and some will escape through the overflow. When the water cools down the level will drop. the valve will open and more fresh water will be admitted, reducing the concentration of the inhibitor. Over time there won't be any inhibitor in the system - just plain old tap water.
The volume of water in the system is approximately 6.5 litres per kW of radiators. The water will expand about 4% when heated so you can work out the minimum space you need to leave between the cold water level and the overflow to allow for expansion.