Just did that on my mac and it seems to work?

    $ ping hello.localhost
    PING hello.localhost (127.0.0.1): 56 data bytes
    64 bytes from 127.0.0.1: icmp_seq=0 ttl=64 time=0.057 ms
    64 bytes from 127.0.0.1: icmp_seq=1 ttl=64 time=0.162 ms