Just finished putting a new tile floor over the old one in our guest bathroom. Now is time for me to install the new toilet. The old toilet flange is still in place but now the height of the tile below the new floor level. I purchased a "flange extension" piece from HD but want to confirm I'm doing the right thing. My plan is to place the extension flange directly on the old one with either plumbers putty or waterproof caulk, insert longer mounting bolts to account for the additional height and then mount the toilet with a standard wax seal. Will that work or is there a better (read more foolproof... me being the fool!) to do this.
Thanks.

The spacer should solve your issue. The top face of the flange should be level with the top surface of the floor. An oversized wax ring can make up for about a 1/4" variance but anything more than that should get a spacer.