Its a small league compared to NFL in popularity and expanding it could increase the popularity depending on the location of the new team. If you could find a good location for the team then you could get a good strong fan base which could lead to the popularity of the sport increasing.
Teams that play in the south tend not to do as well so I would suggest if they do decide to expand to put a team in Seattle or possibly Wisconsin. Also, I wouldn't mind another team in Canada really anywhere in Canada would be good. Plus adding a new team would bring media attention which is always good for the sport.
I think that as long as there is a market for the NHL, it should definitely expand. Research should be done as to what areas would be a good market for expansion, and teams should be based in those areas. I think that Canada would be a great place for the NHL to expand to.
The NHL's expansion into the American south needs to be compared to the CFL's American experiment. It's not a failure overall, like the CFL, but some markets are not working: Atlanta being the prime example.
The NHL should focus on it's roots where it has a huge Hockey base, like Hamilton, for example. And why couldn't the Canada side of the Detroit river handle it's own team? If Winnipeg has the wherewithal to have a team Quebec City surely can handle it again.
Hockey is a sport that can continue to grow in America, particularly in warmer metro areas that see growing populations despite not being traditional hockey areas. It would be good for the diversity of the sport and would encourage people to exercise and to come together as a community around even more teams. Places like Albuquerque or San Antonio or Las Vegas would be great places to have an NHL team.
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The market for the NHL is recessing as it is, and coming off this disastrous lockout where the league lost lots of luster and large amounts of their fanbase, expansion is not what they need at the moment. The NHL needs to settle back into a groove and do what it does best first. Expansion shouldn't come until the league has stabilized once more.