X2. I used to use my 50 gal, and this is what i did for sheds. Just make sure to wash it as soon as he sheds. I usually put clean ones on every day, but a few days shouldn't hurt. Wet towels are a breeding ground for bacteria, so just be careful.
Also, I had a friend who put some we moss in a tuperware container and poked holes into it. That worked as well.