Diablo 3 is the classic of this generation. 4 player local coop, lots and lots of customization, and not overly complicated. It emphasizes on the "gameplay" portion over the "Role-Playing" part, so your character isn't going to be making any multi-choice dialogue options.

You can get it for PS3 or Xbox 360, but it might be worth just getting an upgraded console so it runs a bit smoother and has a bit more longevity.

As far as local-coop games go, D3 is probably the only Triple-A game of the genre that's come out in the last 10 years, and it's still an amazing game. It did a great job in that regards like with its predecessor Diablo 2 (Came out in 2000, was still the best game in the genre until D3 in 2012).

Keep in mind, it's a lot faster-paced than the older games. You have to move around a bit more to dodge attacks, your abilities are flashier and more explosive, so things feel a lot more intense than the older style of "Cast spell, run away".

If you want to keep things on the PS2 level, look into the Baldur's Gate games, which are a lot of fun. Or for more of a Hack-And-Slash gameplay with less plot, look into Gauntlet: Seven Sorrows.