It has been done. I have read some threads in the past about swapping from NP231 to NP-242 and having to bridge a wiring gap from the firewall area to get the Full-Time lamp to indicate.
Are you sure the 2wd wire harness does not have a transfer case wire plug ? You could keep an eye on the local junkyard for a NP-242 97-01 Cherokee and scavenge the section of wire harness you need.
Section 8W - 40 - 7 of your Factory Service Manual has a diagram of the 4wd t-case to dashboard wiring.
Are you sure the 2wd wire harness does not have a transfer case wire plug ? You could keep an eye on the local junkyard for a NP-242 97-01 Cherokee and scavenge the section of wire harness you need.
Section 8W - 40 - 7 of your Factory Service Manual has a diagram of the 4wd t-case to dashboard wiring.