according to the narrorator what is the "law" that rules all terrifying things?

That law would be imagination.....

There can be no doubt that the consciousness of the rapid increase of my superstition --for why should I not so term it? --served mainly to accelerate the increase itself. Such, I have long known, is the paradoxical law of all sentiments having terror as a basis. And it might have been for this reason only, that, when I again uplifted my eyes to the house itself, from its image in the pool, there grew in my mind a strange fancy --a fancy so ridiculous, indeed, that I but mention it to show the vivid force of the sensations which oppressed me. I had so worked upon my imagination as really to believe that about the whole mansion and domain there hung an atmosphere peculiar to themselves and their immediate vicinity-an atmosphere which had no affinity with the air of heaven, but which had reeked up from the decayed trees, and the gray wall, and the silent tarn --a pestilent and mystic vapour, dull, sluggish, faintly discernible, and leaden-hued.