Probably depends on the cable. On my 88, I've been able to pull half the cable out and slide it back into the cover, and the speedo is just fine.
I remember that tcase - did you get a new speedo gear? Dumb question, but you haven't answered it yet.
The wheel sensors are usually wired into the ABS, and nearly every vehicle I've worked on has taken the forward speed reading off of the tailshaft - either at the transmission or the transfer case.
What I'd really like to find is a speedo that goes, say, 30-0-90. Why? So I could tell how fast I'm going when I go backwards - and it's something I've never seen...
You might want to try pulling it the cable at the transfer case and see if you can pull the cable out of the sheath - if it's broken, you'll know when you see the far end of what you pull out. You can probably replace the cable without having to pull the sheath and all - just know how long you need it to be, and cut the replacement to fit. The ferrule they give you to make the other square end usually just crimps on, and the square always seems to be a standard size. Lubricate the cable with dry graphite as you insert it into the sleeve.
5-90