Interesting -- I actually come to the opposite conclusion based on the same premise described in the first sentence of this post! I would vastly prefer any interior placement of the park over one fronting Dufferin, both because the road is such an unholy mess of cars being driven at breakneck speeds, and it doesn't make sense to me to have an "extension" of Dufferin Grove because it's sort of just wasted space.
Also an interior siting makes for a less relentless block pattern, and improves the livability of the units fronting it.
I can understand what you're going for; I think part of the problem is that the existing proposal north of the mall/on the mall's surface parking involves putting a small park on Dufferin.
Once that's done...........any subsequent interior park will be a smaller, less usable space.
Unless, in a future development, the City traded the 'new' park on Dufferin for an even larger interior space.
It's all rather hypothetical.
But for me the issue is about park size; and any choice where the local street grid is substantially restored will be accessible to area residents from all sides.
So I lean to a critical mass of size that allows quality (room for a soccer field or whatever) as opposed to two different parks both too small to realize true potential.