You'll need to read the documentation that comes with Basilisk II, but yes it can work. Basically what you do is install a custom made protocol driver to you windows ethernet card. Then use Basilisk II's setup program to configure everything. (Documentation and drivers are in the Basilisk II's folder.)

I tried this feature out once. I used Mac OS 8 instead of Mac OS 7. (Plus I was using SheepShaver.) But it should work fine.