This would be an inductive sensor when you're wrapping a wire around the spark plug wire. The current flowing through the spark plug wire induces a current in your coil.
The Arduino pins are protected by what are called "clamping diodes" that will protect the pins from high voltage currents under 1ma. I wouldn't expect to see more current than that from your inductive sensor unless you use a large number of wraps of wire, but if you want to add additional protection you would add a resistor between the coil and Arduino input as well as a 5.1V zener diode between the input and ground (coil -> resistor -> zener cathode -> analog input). Zeners are like regular diodes conducting from anode to cathode with a .7V drop, but also conduct cathode to anode when the voltage is over their rated breakdown voltage.
How many times you should wrap a wire around the spark plug wire and what size resistor you should use is hard to say. Perhaps the simplest way to test would be to connect both ends of your coil to an LED and judge by the brightness of that LED.
Expect a lot of electrical noise to mess with your readings as well. That is why there aren't any "easy" schematics used in this situation.
Thanks for the reply. So in theory an inductive pickup would work without additional high voltage protection? Would there be a way to filter out the electrical noise?
I was also thinking about a Hall effect on the magneto but it seems like that whole area will be more trouble noise-wise compared to the spark plug wire (since my only way out of there is where all the other wires are going, including the CDI and spark coil). That also might not work with all aftermarket magnetos (performance ones tends to have an inner rotor, not as easily accessible, altho I havent seen one personally to see where I could put the sensor).
If you get a miniature glass wire ended neon this will fire when coupled to an ignition wire in this way. I did this way back in the 60's.
Now if you put a photo detector transistor against this and wrap it in black tape you will have made an optical isolator so the flashes are safly read by your arduino.
Interesting solution! Im wondering how it would fare with speeds of around 12K RPM (200 flashes/sec).