You posted your question in the "using Arduino" forum section. Do you plan to use an Arduino? If this is all the circuit will do, it would be a waste of an Arduino, I think.
But if you do plan to use an Arduino, I would connect the two stainless steel probes to a digital input pin and an analog input pin of the Arduino. Set the input pin mode to INPUT_PULLUP. then read the analog input. If the probes are above the water level, you should get a reading which is close to zero (but may not be exactly zero). When the probes are in the water, you should get a higher reading. You can choose a level between the two readings and use an if-statement to trigger your alarm.
The small current that flows when the probes are in the water could eventually corrode them even though they are 'stainless'. To reduce that, have the Arduino digital pin in INPUT mode for most of the time. Every few minutes/hours, have the Arduino switch to INPUT_PULLUP, read the analog input, and then switch back to INPUT. That way, the current will only flow for a moment each time a reading is taken, which will reduce any corrosion.