Its really very simple with a hall effect sensor. You just need to fix the sensor and arrange for the small magnet to sweep accross its face. So that means the magnet can be glued into a small hole in say the flywheel boss or timing gear and the sensor to a non moving part of the engine. If you want to be able to advance & retard the timing then the sensor is best on an adjustable disc that can be rotated around the engine axis, Thats what I did on my hit & miss engine.
You then just run a earth from the engine to circuit board and a plug lead to the plug.
Here is another site with some set up instructions
J