If a 240 has a speedometer cable, then the cruise control installed in it gets its speed signal from a small coil that fits into a covered recess in the back of the speedometer. That coil comes out of the donor speedomoeter after you remove the two small screws that hold it in, and you will have no trouble installing it into the receiver car's speedomoter, assuming that that car, too, has a speedomoter cable. Your retrieved harness should have two wires with terminals that connect to the coil on the back of the speedometer. I think those wires are several inches long.

The differential on these cars contains no "speed wheel," so switching to a new differential cover with a sensor in it will prove fruitless.

Typing "240 Cruise Control" into the search window above will yield a few dozen relevant threads that will provide an excellent education on this complex subject.
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jds

I'm not sure what voodoo goes on behind the dash...but my '83 with cruise control has the cable driven speedo (driving gear at the tranny). There is no speed sensor in the rear diff.

There were three types of Criuse control used on the 240's lets call them 1,2 &3 from early to late.
#1 used a vacuum servo on the throttle inkage, a vacuum pump mounted on the firewall on the passenger side near the head. The 'computer' was simply a switchbox.This is an entirely self supporting and regulating system that didn't interface with anything except the idiot light on the dash and lock-out for low gear(?not sure on that)
#2 used the same vacuum servo as #1, but took vacuum off the manifold, and has a computer that was tied into the ECU to manage the speed control and vacuum. It was not tied into the instrument cluster. This model did not have a signal from the diff speed sensor directly, and the diff speed sensor was only added on cars after '84, so the '83 should not matter what the speed is when you set it, it's only reference is vacuum and cable position. #1 and #2 uses the same column switch, but not the same as #3
#3 used a vacuum servo mounted on the pedal, a vacuum pump mounted on the firewall on drivers side, and had the computer mounted above the steering column. This ties directly into the ECU, not the instrument cluster, which takes signals from the speed sensor and engine rpm sensor to govern speed via the pedal liknkage.

If I were you, I would find one of the early 240 set-ups, #1 the one #2 that used vacuum off the engine didn't work very well.
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'89 245 sportwagon, destroyed by hit & run driver, RIP. '04 V70 2.5 T Sportwagon, 12k mi and '91 245 5-speed, 209k mi, replaced the '89