you can use single RGB led with common anode like these.
almost any thermistor of RTD will work. since attached to engine block, self-heating of the sensor is not an issue. thermistors are very stable but not linear. nonlinearity is not an issue since you are only looking at two fixed points. if using RTD, better choose one with a larger resistance to avoid need for zero-drift amplification. PTC or NTC does not matter, just swap the places of the sensor and the fixed value series resistor. you may pick one that is easier to mount and with wires that have insulation rated for this.
I'd use a micro too. Here's the schematic of a simple ATTINY- based device that can use a thermistor for analog measurements or a DS18B20 (or one of many other similar) temperature sensors (either one or two-wire interface).
An onboard programming interface allows it to be programmed in-situ if need be.
Somewhere I have the PCB layout, and possibly a spare board.
OK, my first shot at a simple scheme for two LEDs to indicate that some point of the engine is above or below 65 degrees "C" But no hint if that is water temp, oil temp or engine block temp. The incredibly simple scheme is a thermostatic switch that changes at about 65 degrees. Two LEDs and a resistor in series and the switch is connected across one of the LEDs. So below 65 the switch will be open or closed, short circuiting one LED so the other will light. Then when the switch changes states the other LED will light. OK, there does need to be either a second contact to short the other LED or a resistor across the one that was lighted..
That is the very simplest scheme I can come up with. What we do not know is just what has the temperature that is being monitored.Air, oil,water, or engine block?