Essential reading.

This is how to start the range. Terrance Dicks (a well-loved Classic Who writer/script editor, having written the War Games, Robot, and the Five Doctors) tells an epic tale taking full advantage of the budget-free medium of the written word, and delivers a very good Doctor Who book. It does have some under-the-surface implications about history that make some uncomfortable in the second half, but one can easily read it in a way that dismisses this, and in doing so, you get to enjoy a lot of good in the book itself. That problematic reading aside, a couple of scenes towards the end mischaracterise Ace in my view.

The book's main issue is really that there's an implication that the Nazis only came to power as a result of the scifi interference involved in the book. This can be dismissed with the simple explanation that the interfering scifi element only went to earth because of the events of the previous book, Genesys, and in fact the Doctor himself at various points uses the phrase "getting history back on track." So, logically, this reading doesn't make sense. There are only a couple of lines in the book that really pay any lip service to this reading, and they stood out to me as rather logically nonsensical—as well as being a wrongheaded take on the very human evil of fascism, specifically the racist, nationalist version of it deployed by the Nazis.

The book as a whole is very good, but there are definitely some problematic ideas presented in a few scenes in the early second half. If you can look past that, however, it's a very good read. Personally, I favour the first half of the book over the second—while the second half is something of a historically-based political thriller, the first half is wonderfully fun pulp action in the vein of WWII-era noir films.

Essential background: The War Games (season 6)
Extensive background: The Deadly Assassin (season 14), the Five Doctors (special), the Curse of Fenric (season 26). Technically also Timewyrm Genesys, but frankly that book's so bad it's not worth it.

In my reviews, particularly of the Virgin New Adventures, I prefer to use a 4-tier system of grading:
Essential reading - If you want to read all the best VNAs, get all the most memorable story arc beats, and generally enjoy the VNAs without having to trudge through the mediocre/bad books, or perhaps even if you just want to pick up a good Doctor Who book with no intention of reading the entire series, look for this rating.
Worthwhile for extensive reading - Not outstanding, but I won't outright tell you to skip it if you want a sense of the VNAs overall. If you're determind to only read the best, skip these, but for a read-through of the series, I wouldn't skip them. They're the worthwhile, good-but-not-amazing books. You'll get a stronger sense of character arcs, story arc beats, and the growth of the VNAs as a range if you read these, but it will also take you a lot longer.
Not recommended - Not very good. If you really want to maximise your experience of the VNAs, you could read this, but it's definitely not advised.
Avoid at all costs - An irredeemable lump of human fecal matter. Do not waste your time with this insult to the franchise.

In addition, I list Recommended background that you may find necessary for understanding the story in full, as well as Extensive background for some additional details you may find interesting.