Your argument that the origin is asymptotically stable is correct. To find a region of attraction, identify a region where the Lyapunov function decreases along trajectories.
Since you found that $\dot{V} < 0$ everywhere (except at the origin), this means that all initial data are attracted to the origin - there is no restriction.
Of course any smaller set (e.g. any circle) also works since the Lyapunov function argument shows that trajectories always stay within any circle in which they start.