The diagram looks mainly right, however the connections to the heater are wrong. It may work like you have drawn, but if you take the coolant from the two pipes drawn there it'd be coming through some pretty small fittings.
Usually the heater supply comes off the back of the head, and is returned into one of the pipes on the remote thermostat (the brassy looking one you can unbolt).
Also make sure the red and blue pipes in the diagram are both connected to one side of the thermostat. This allows some coolant flow with the thermostat closed. So the thermostat "sees" the correct coolant temp and opens when it should.
Hen
