I don’t see why not. Especially due to the fact that many Apple/Mac technicians (including myself) now use El Capitan as the preferred operating system to install on problematic macs after resolving hard drive failures. It’s just a more recent OS and widely compatible even with older systems.
Regardless, your iPhone 4 backup isn’t going anywhere if you upgrade to El Capitan. It’s treated like a regular data file.
After the upgrade to El Cap, you should be able to restore from backup and your iPhone 7 will be all set. The only issues you might have is that any older apps from your iPhone 4 might not exist anymore or the developers no longer update them, meaning your iPhone 7 cannot support them.
If you’re unfamiliar with restoring using iTunes, reference the Apple article under '''“Transfer your iTunes backup to your new device”'''
Article: [https://support.apple.com/en-us/HT201269#itunes|https://support.apple.com/en-us/HT201269#itunes]
Hope this helps!
-Alex