The outputs appear to be "Open collector" - imagine them as switches to the 0V / GND of the supply.
That allows you to use pull-up resistors to whatever logic supply voltage the electronics the encoders outputs feed - 5V, 12V or whatever, independent of the supply to the encoder itself - though they can also all work on the same voltage.
Without knowing the exact specification, I'd keep the current to 5mA or lower, so eg. no lower than 1K pull-up resistors for a 5V logic supply, or 2k2 if they connect to the 12V supply.
You could connect LEDs in series with the resistors for the 12V supply, but that will reduce the "high" voltage to about 10V - that may well still be OK to feed other logic circuits.
If it's running on a 5V logic supply, connect the LED in series with the 1K and add another resistor, eg. 4K7, from each output direct to 5V to ensure you get "clean" logic level.
(Use 22K direct to power with the 12V version to get the full 12V "high" level, if needed).
Edit - links added:
Electronic motor controllers require an encoder to detect rotor position and/or speed. Does the encoder need to be incremental, absolute or commutation?
www.digikey.com