I depends on the older child.
Some are fine with it, some are not.
And yes, the baby can wake the Toddler. But the Toddler can wake the baby too.
When I had my 2nd child... he slept in our room in a crib.
My daughter had her own room, else where in the house, on the same floor. (we have upstairs/downstairs).
Babies... wake at all hours and they cry. It woke my daughter up. She was about 3.5-4 years old at the time. Or, she would get 'worried' when baby cried and woke. Regardless, it was a sleep interruption for my eldest child. Then with interrupted sleep, they get sleep deprivation too... just like an adult would when they have a baby. But with toddlers, without a good sleep, they get fussy and over-tired, from lack of sleep.
So something to think about.
For an adult and a baby, the adults get lack of sleep too, because you need to also feed it during the night for feedings etc. If your toddler is a light sleeper.... they may wake, too.
For my daughter, it took awhile for her to get used to her baby brother waking/crying at night, and me waking to feed him. I'm talking 1 year. I also, explained to her, since she was about 4 years old... what a baby does.... it wakes/cries/I need to feed him during the night. I explained that she does not have to "worry" about it, because it is Mommy's "job" to wake at night etc. That helped her....
Then, Toddlers often have their own sleep issues or wakings. Which are age related. And they are mobile. They wake, get out of bed... . may go over to the crib and wake baby too. Or poke and prod the baby while it is asleep.
My daughter, although good.... would often want to "see" her baby brother sleeping... she'd go over to the crib (even if it was in our room), and she'd pat him or talk to him etc. And then, that woke him. To my frustration.
But Toddlers, do NOT have fully developed "impulse control"... so well, that happens.
The thing is.... there is no way to predict how it will go... with a new baby in the house and with sleep.
AND... your Son may have his own feelings on it... so you need to talk with him about it. He may not want to 'share' a room, for example.
And some kids have no problem sharing a room. But, at each age phase... a baby and a Toddler, have different sleep issues. They both wake.
My parents, when we were kids, had me and another sibling in the same room. It did not work. The older sibling... was mega controlling and bossy, and she 'resented' having me in "her" room. That is just my personal example.
all the best,
Susan