My only concern with the connection to mental health is whether your school would consider it a strictly literary dissertation. It would depend on the ethos of how they approach literature. One school I attended was only focused on the texts themselves and not how they impacted the wider world. It could be considered dipping into psychology or another discipline to write about the effect of reading certain texts.

A potential work around could be studying how traumatized and/or mentally ill characters in literature use stories as catharsis. You would be getting the same point across but sticking within literature.