Can we use 'it' in this case...

We have been told:

‘which' and ‘it' are used to replace a noun, not a sentence or idea; ‘so' is used to replace a verb/idea in a sentence.

Based on the above, is the following sentence correct:

Playing football is good for health because it makes your heart healthy.

In the above sentence, 'it' would refer to 'Playing football'. So, is this usage of 'it' correct?

Thanks.