If the engine is sealed you have to remove the plug from the outside, if not take the cover off and fix it that way.
To remove the stripped 1/8 NPT plug use a screw extractor like an EZ-out or similar and when ready to go, heat the area around the plug a bit, as it was originally installed with thread locker. When you drill through the plug, go easy and use some grease on the drill to catch the chips.