While that works, it doesn't help with short-period variations of the VCC rail, which can degrade accuracy, and it halves the maximum sample rate, assuming you read ADC0 before every reading. Consider using a 4.096V reference - it gives you a decent ADC input voltage range, and 4mV per ADC count for easy maths, but remember the Atmega's AREF input also outputs its internal reference, so a 1K resistor between the reference and the pin + 0.1uF decoupling rght at the pin is strongly advises to prevent disasters if you misconfigure the ADMUX REFS bits.