Is including an own paper in the literature review a bad practice? The title mostly says it all. 

I am writing an article on a rarely researched topic in my field - 4-5 articles exist, as far as I know. 

I recently published a related article, still making this topic a rarely researched one.

Would it be a bad practice to include my own published article in the literature review?
No, not at all. You should cover all publications which fall within the scope of the review, and if one of them happens to be a paper of yourself, then of course you still have to cover that in your review. Just make sure that you try to be objective in the way you discuss it. Best practice would be to review your paper as you would review a paper by any other author.

Maybe you have a coauthor in the review who was not coauthor on the research paper? Ask him/her to do the review section about that research paper.

Also note the positive aspect of this situation: having published a research paper in the area you are reviewing gives you more credibility as an author of a review in that area.