In general, capital "L" Legends stories are not in-universe small "l" legends.
First of all, Disney called "Legends" a "banner" when Legends was introduced:
Demand for past tales of the Expanded Universe will keep them in print, presented under the new Legends banner.
Disney did not say that "Legends" was a collection of small "l" legends within the Star Wars universe. It's just the name of a banner that Disney has added to old Expanded Universe material to indicate that it is non-canon, e.g.:
Furthermore, let's consider a definition of the word legend:
a nonhistorical or unverifiable story handed down by tradition from earlier times and popularly accepted as historical.
Many Legends stories do not meet this definition. For example:
- Legends stories continue to the year 138 ABY (After the Battle of Yavin). This would occur after Episode VII, which occurred in year 66 (the Battle of Yavin occurred in Episode IV, which was in year 32, so Episode VII occurred in 34 ABY). Such stories could not be "accepted as historical" in-universe because they haven't "happened" yet.
- Some Legends stories diverge so sharply from the canon continuity that they are verifiably false (as opposed to a "legend", which is unverifiable). For example, the Yuuzhan Vong War occurred in Legends in 25-29 ABY (before Episode VII occurs), yet no character during the events of Episode VII would believe that there had been a galaxy-wide war against an extra-galactic alien species (which also involved the transformation of Coruscant) just a few years before. Such stories, if they existed in-universe, would more accurately be called an alternate history, such as the alternate history novels we have in which the Axis rather than the Allies won World War II (e.g. The Man in the High Castle).
It is possible for some Legends stories to be considered in-universe legends. For example, the exploits of the Sith Emperor introduced in Star Wars: The Old Republic could be considered a legend in-universe if canon characters were in fact aware of stories about him. He ruled thousands of years before the events of the films (making it difficult, in-universe, to verify them), and he could be the basis for Palpatine's statement in Episode III that "once more the Sith will rule the galaxy".
In general, however, capital "L" Legends stories cannot be considered in-universe small "l" legends because they just don't fit the definition of a small "l" legend. Moreover, I'm not aware of any reference to a specific Legends story in canon (e.g. a mention of the Yuuzhan Vong War). Even Palpatine's statement about the Sith ruling the galaxy before can't be tied to the aforementioned Sith Emperor character. Characters don't seem to be aware of Legends stories.