Yes it does that now.
I don’t think it will play music that was copied from CD’s that you have in your library. I’m not entirely sure but there’s some limits. I have Apple Music so I can’t test.
If you have an Apple Music subscription, then you can ask Siri to play anything from the Apple Music catalog, your library, and access features, like finding songs by lyrics and adding music to your library.
If you don't have an Apple Music membership, then you can ask Siri to play music from your music library, including your iTunes purchases.
Use Siri to play music or podcasts - Apple Support