Is it possible to use Time Machine on a shared USB Hardrive?

It should be possible, but it will not be able to use your existing MBP backup (you will need to start it from scratch). Just plug the disk into the iMac, make sure it is being shared, and then select it in Time Machine setup on the MacBook Pro and let it do the initial backup.

The reason you can't use the existing backup is that when you use a disk for Time Machine it uses that disk directly, since it is attached to the machine and the machine knows no other machine is modifying it. When you use it over a network it creates a disk image and puts the time machine data in the disk image (in essence, it is a poor man's version of thin provisioning. Migrating between these two configurations is possible, but non-trivial.