That's how I make mine. Only I use 6 1/2 inch squares. I cut all of my pieces the same size. Sometimes the middle will shift a bit or stretch but you can't tell once it's clipped and washed. By keeping the middle piece the same size, it adds a layer of depth to your "rags" - meaning the color of the center square comes out and blends nicely with the other colors. So, make sure it is a complimentary color scheme!
:)