Spindle Motor Encoder

Hi Everyone!
Hoping you can shed some light.
I ordered a motor that has an encoder attached to it. I plan on using it for my G0602 cnc build.
My question is, is there anything that this encoder is useful for in this application or did I waste money?
I know that typically the encoder should be on the spindle, not the motor. If I were running a 1:1 pulley ratio it would seem to make more sense, but Im not sure if whatever is accepting the signal (which im not sure of, vfd, mach3, ??) can be adjusted to read how fast the spindle is running based on motor rpm.
I plan to use a Teco JNEV VFD and Mach3.
Here is the encoder in question:
Series HS20 Sealed Hollow Shaft Encoders - Dynapar Incremental Encoders

And here is the motor:
Y284, 145THTR15540, 1 1/2 Hp, 230/460,145TC FR,1800 Rpm,1024 PPR

Thanks for the help!! Im sure Ill have plenty more questions as this build progresses.

Looks like a pretty decent motor, 4 pole inverter rated motor by the look of it.
If you intend using the encoder, you will need a VFD with encoder or P.G. option fitted.
Mach 3 cannot accept encoder feedback for motors.
Al.

Thanks for the response. I had planned on using teco jnev-202-h1. Is there something I would need to add on in order for this to work?
Thanks

That model does not appear to support an P.G. or encoder option.
Normally you need to order this when purchasing, if the option is offered.
Al.

OK thanks for the info. I canceled my order and went with a regular inverter duty motor without encoder.
If anyone is interested in the Marathon Max+ with encoder, these guys have the best price by far:
http://dealerselectric.com/Y284.asp