I'm leaning toward the shorter dreads in your case, mainly because I think they'd look better with your darker biohelmet, Wolf neckring, and more imposing shoulder armor. Since you're doing a custom character, though, there really isn't a right or wrong about it.
My suit has the longer dreads, but that was mainly because I wasn't paying attention between the AVP dread length and the P1 dread length. Then again, my character isn't strictly a P1 Predator; it's influenced by the comic "Predator: Cold War" as well. Maybe I could explain it by saying that my character is kind of a youngblood and he's growing his hair out to be rebellious.
Hey, there's an idea: How about a Predator with emo-style hair? You know, kind of shaggy in the front, drooping down over one eye, with odd colors that don't exist in nature? On second thought, maybe that wouldn't work.