Uh… the battle.net website says “1.9 GB available hard drive space”, that’ll be a close one. If it will install at all, because on the same website, Windows XP is listed as minimum requirement.
If the installer works, and if the file size is too large, maybe you can delete the video container file (d2video.mpq) during install, or replace it with a 0 Bytes dummy file during installation.
Or you install it on your PC outside Dosbox, then copy the files to a 2 GB hard drive image file, and copy that to your phone. And hope it’s only the installer which needs WinXP, and the game itself will run in Win95.
The last solution would be to get hold of the original CD version. Can’t point you to illegal downloads, obviously, and you’d still need a cd key, but the cd version is available e.g. on Amazon for a few bucks (the “Bestseller” series for 7 EUR), and that one’s officially listed as Win95 compatible.