Should I insulate above a suspended ceiling or in the attic?
It's not common to see insulation below a hard ceiling (immediately above a suspended ceiling--even if it's drywall). That space is considered "conditioned". 

However, if your dropped ceiling is in effect a hard ceiling, it may make sense to insulate at that level. To do so reduces the conditioned space volume and would be more efficient. 

It's going to depend on access and the structure around that room, as well as wall insulation and HVAC configuration. 

In response to your comment, it wouldn't be a problem to insulate the lower ceiling as long as you have a continuous blanket through to the ceiling in adjacent rooms.