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I tried it; the creature starts occupying 3-4 tiles, but it loses the ability to move (it behaves as if its speed is 0, even though it has enough speed) and looks terrible graphically. Also, there may be problems when trying to start a battle without the "Tactics" skill if there are only level 3 creatures in the army. In short, it's a bad idea.
Example 4*4 http://c2n.me/49JxUeq
. If you have the Tactics skill, you can deploy such a "heavy hitter"; if you don't, you're out of luck. The original dream was to increase the scale (occupied area and the model itself) of the dragon upgrades and add a splash attack ("Major fire breath") to 3 tiles (instead of the original 2). Ideally, it would also be nice to reduce the growth rate to 1 per week (as in Heroes 4), but that's pure fantasy