Spindle Encoder

I want to upgrade my maho mill with Rigid Tapping. The spindle goes Upto 3200 RPM max and 52 rpm min. The problem is what rotary encoder should i use. is 1000 PPR enough for my purpose. the below encoder crossed my mind.
robu.in/product/orange-1000-ppr-ab-phase...ical-rotary-encoder/

But there is yet another problem. this is just a 4 wire encoder. most of them are only 4 wire on most of the websites. A , B and Vdd - Gnd. So how will i connect it with mesa 7i77? as it requires A and B inverse signals also. and For rigid tapping, Indexing signal for spindle is necessary?

The 7I77 can use 4/5 wire encoders (you set the input jumper for "TTL" mode)
but differential mode (8 wire) encoders are better for noise immunity so its
better to choose these.

Yes ,index is required for rigid tapping,