It's been confirmed that the new Toy Story world in Kingdom Hearts III will be canon to the Toy Story timeline:

So, I guess this means that Sora, Xehanort, the Heartless, and all the complicated and intricate natures of the KH universe such as time travel, different realms, body swapping, cloning, and datascapes are all canon in Toy Story. This is amazing lmao

So, yeah, I guess get ready to add the insane KH plot to the Toy Story wiki page when the game comes out in 2018 lol

And for those who say that Tetsuya Nomura (Kingdom Hearts series director) doesn't call the shots of what's Toy Story canon or not, keep in mind that Pixar literally helped with the design and development of the Toy Story world in KH3. They designed Sora, Donald, and Goofy's Toy forms, the Toy Story Keyblade, and created the brand new story for this world that takes place in-between Toy Story 2 and Toy Story 3. Nomura's just relaying to us info from Pixar that this is canon.