No, I don't have an SH500, but the switches in CNC's are pretty universal. Not much has changed in the past 40 years except prox switches have gotten smaller.
Cylinder position switches are usually "tie bar mount" and mount to the cylinder tie bolts with some kind of bracket. Your machine is 15 years old. Bet there's some evidence of roughly where your switch mounts if you inspect it carefully. Some cylinder switches screw into the ends of the cylinder.
In general, a cylinder will have two position sensors, not one. One at each end of it's stroke. Cylinders with position switches use torroidal magnets fixed to the piston inside the cylinder. The "sensors" are switches- Either solid state or just a simple reed inside. There are two and 3 wire versions, but they work similar. 3 wire can be NPN or PNP style, 2 wire are all the same.
Figure which end of the cylinder you switch attaches, make sure the cylinder piston is in that end of the cylinder then attach the switch so the LED is on.
If you get a magnet near the switch you should see the LED light up.
Worse case scenario if you attach the switch to the wrong end of the cylinder the machine will have an ATC error. Swap to the other end and if the error's gone you got it.
Also, most pneumatic valves on CNC's have manual overrides. Say you need to cycle the cylinder to mount the sensor- Find the manual button and use it to set your sensor.