Actually, make it do this for every city, not just the first one.  I would recommend having the AI check a 2-tile radius for better land before settling any city, and if they find something better, move there.  For the first city, don't move farther than 2 tiles (simply to prevent the AI from searching for the perfect city site until they're killed by a slag), but after that, the AI should reevaluate their chosen location once they reach it.  If it's still the best spot in 2 tiles, OK, settle.  But if not, move to the better spot, rinse, and repeat.