Simple Drop Shadows (WoW-like)

Can't you just draw an alpha blended, circular sprite underneath the character, aligned with the terrain based on the ground plane normal?

I managed to do this long ago with stencil buffer.
I don't remember exactly how but it was something like this.
Draw terrain.
Draw the sphere to the stencil(depth test enabled)culling back facing and increase the stencil number.Then change culling to front faces draw sphere again this time reducing the stencil number.This creates a circular area under the character.
Then switch back to color buffer and draw a black semi transparent quad in ortho mode drawing only where stencil buffer is set.
This is like stencil shadow volumes except you don't do any edge extrusion just use spheres for the shadow.
I'm sure there are better ways like projecting a texture from top on the terrain.