2 - 2.5 hours is reasonable (not certain). I've flown through Iceland to Paris four times. Two on Wow and two on Iceland Air (at least one Iceland Air landed at Orly instead of CDG). Because you're coming from another Schengen country, you may not land at the same terminal as other "international flights". I probably ignored the sign that said to go a different way if you have something to declare and walked straight to ground transportation.
When you get off in Iceland, you are routed through the airport - pretty much straight through to your connecting gate. One stop is at passport control. Iceland is a Schengen country so this counts for arrival in France. Even though I've never spent more than five minutes in line (usually no line), I barely have time for a quick snack in Iceland before boarding my connecting flight.
I pack only a small shoulder bag so I go straight to the RER. I've found it takes me right at one hour to get to the RER station, buy a ticket from the machine and be leaving CDG on a train into Paris. It takes another 45 minutes to get generally downtown. Add up to 20-30 minutes on the metro and ten more walking to my lodging and it's in the 2 to 2.5 hours range getting downtown.
For you, I'd plan 1 1/2 hours to get your bags and get to a taxi (hopefully not too much more) and about another hour to get to your hotel by taxi. No telling what traffic will be like getting downtown. Follow the ground transportation signs to the taxi stand in front of your terminal.