You are right the setting on cost and effort will allow to enter time on closed project.
But, if you want only specific projects to allow time on closed project then you can create/copy the same project type and allow those projects to use such project type.
So basically you have two project types,
1. Does not allow time to be entered on closed projects. 2. Allows time to be entered on closed projects.
All the projects can follow either of the two options based on if it should allow or not allow time to be entered on the closed projects. Is this what your requirement is? If not, please elaborate it little further to know the exact requirement.