That indicator needle is spring loaded and pulled by a string. The shift position sensor that you should be looking for is on the transmission itself. Follow where the shift cable routes to the transmission, that is the sensor that tbirdscott is pointing you to.

I've pulled my electrical connector off and sprayed it with contact cleaner, then reassembled it with dielectric grease, but it didn't help. I'll change mine soon and hope it helps my problems.

Good luck with yours!