The only way you could have handled this better, from your own point of view, would have been to have declined the invitation. However, doing so would probably have left you feeling uncomfortable.
Go and try to find out in the course of the time you spend with this woman whether you and she have any interests in common,
You say you have not seen her for years, and did not know her particularly well in the past, so you may be pleasantly surprised and find her to be a person you are happy to see more of.
If not, then obviously, you should stress how busy you are and that you don't have a lot of time for being social.
Actually, you might want to make that clear whether you find you enjoy her company, or not.
It will only cause difficulties if you give her the impression that you have plenty of time to see her, when you don't.