I haven’t actually done this, but I’m responding since no one else has…
This SHOULD work. Quite a few people have posted on these forums that they use a Raspberry Pi as a Plex server, and you can attach a drive via USB to store the media. The most common problem is that the Pi doesn’t have enough horsepower to transcode, so make sure that you can direct play or direct stream your media since those have minimal CPU demand. Determining if you can direct play or direct stream is driven by how your media is encoded (h.264, etc), what media container you use (mp4, etc), and also what client(s) you want to run the Plex client to view your media. Plex can be used with no internet - see here.
