The temperature sensor should be in the driver's side head, not the passenger side head. As far as I know, the factory never installed one in the passenger side and never one in both heads. The sensor in the driver's side is what feeds the dash gauge. It goes into the engine harness on top of the engine nearby. The ECM uses a different sensor near the thermostat. The info from the sensor near the thermostat is what the ECM uses to control the auxiliary fan and all other engine control functions.
As far as you know doesn't count for much in this example. The dash gauge temperature sender is indeed in the driver's side head. The auxiliary fan switch,
when equipped, goes in the same position but on the passenger side head. We've already covered that in this thread for one's edification.
(There are other examples, like some TPI engines have the aux fan switch installed in the block, passenger side, but obviously not relevant to GMT400 trucks.)
Let me assist a little further - go to gmpartsdirect, look up a 1996 C3500 with a 7.4, go to cooling system section, fan, scroll down past the mechanical clutch fan and note the electric fan setup that mounts ahead of the condenser. See the part # 12554254 (discontinued) referred to as a "fan switch" ? That's what sits in the passenger side head on that particular application, and controls that fan.
Richard