Being that your divisor is two bits, it can only have four states. 00, 01, 10, 11. So we could have four different modules of the circuit, and use a multiplexor to pass the output from the correct module to your display.
00 is the easiest case, you return some kind of error code, as you can't divide by zero. Maybe turn on a single LED that has "error" written on a piece of tape beside it in your breadboard.
01 is the next easiest. Anything divided by 1 is itself. So you just take whatever was input, and pass it straight to the output.
10 is the first one that requires modifying the input. Pretty much all you need to do with that one is use a shift register to bit shift right one place.
11 gets fun. ^_~ Have you done truth tables and Karnough maps? Perhaps even the dreaded Quine McKlusky may be needed for table correction. 7 bit input will give a 128 row table. Ok that's not a good idea. Hmmm I can't think of a really good simple idea for this one immediately.