Every once in a while I find myself liking a book unexpectedly, or disliking one, or otherwise pondering what it is that appeals to me or doesn't in literature.
The most important thing is that it be real. This has nothing to do with the setting. It can be set in my neighborhood or in a parallel dimension; the characters can be stuffed animals or mythical gods. But it must be real about the human condition. You should be able to read it and think, "Yes. This is true. This is what being a human being is really like."
It's currently fashionable in literature to confuse being real with being sordid. Details about bodily functions or sex or death are irrelevant to the question of whether the book is real. I already know about the physical details from personal experience--I want new perspectives on what physical experiences mean. Being ugly or shocking in a quest for meaning is one thing; being ugly or shocking to sell books is not going to sell me one.
Also, I want some form of moral resolution. Things must come out right-side up, which does not necessarily mean a tidy ending with all the good rewarded and the bad punished. But it must be clear what good and evil are, even if the entire book is written upside down (like Screwtape Letters). Even empathy with the evil characters is not a bad thing--indeed, it can be a very good thing--so long as we are still able to say, "His choice was understandable, but it was still wrong."
So a piece that surprised me in its appeal--that I literally stumbled upon--was Medea, by Euripides. It's an ugly story. (Medea was a princess and sorceress who ran off with the adventurer Jason when he came to steal the golden fleece, killing her own brother in the process. She then helped Jason kill his way into power. In this play, Jason is dumping her for a new wife--in revenge, she kills his bride, new father-in-law, and her own two children by him.)
Medea and Jason are alive. The words could be written in fire, the story could be headline news. Even though Medea is a witch, literally and figuratively, her rage is comprehensible, her grievances real. There could be no happy ending, yet it is obvious she chose, and chose knowingly, the worst possible one, one that destroys herself and everyone around her. It's an unpleasant but convicting look into the reality of our own wicked hearts.
Finally, there ought to be words to savor. Phrases that are sweet on the tongue, sentences that make you want to jump up and find someone to hear them. Something that makes you think, "Yes, yes, I knew that but couldn't say it so well."
So: True, Good, Beautiful. Not a very original criteria, I suppose, but originality is highly overrated.