Coolant temp gauge doesn't read much above cold

I'm new to this bodystyle Ranger, bought one a few months ago for $675 and pulled the engine, replaced all the gaskets and resurfaced some stuff, and stuffed it all back in. I've been driving it for a little over 3 months now and the coolant temp gauge has never gone much above cold, but it rests pretty low it seems when it's cold. Is there a special way I have to bleed it to get it to read right or something? Could a fouled sensor be causing this? The coolant(or what was left of it at least) in the engine when I got it looked like mud, felt like mud, smelled like exhaust, and took a lot of work to remove. It was driven around like this for a little while, but only short distances. The heads weren't crazy warped once I got them off, just a tiny bit out of spec and the head gasket only failed in one place.

TL;DR: My coolant temp gauge doesn't read much above cold(just above the 2nd line from the bottom), what could be causing that?

The Thermostat sets minimum coolant temp in an engine, which should be 195degF for Ford engines.
195degF should be above 1/4 and below 1/2 on the gauge, 1/2 on Ford gauges is about 215degF

First check the sender wire and gauge:
Fuel injected engines have TWO temp readers, a sensor and a sender
The sensor is only used by the computer, it has 2 wires
The sender is only used by the temp gauge, it has 1 wire

Find the 1 wire sender, unplug the wire from the sender
Turn the key on, temp gauge needle should be all the way down
Put a jumper wire on the sender wire and ground it
Temp gauge needle should now be all the way up, HOT
If this happens the wire and gauge are good.
If needle doesn't go all the way up then gauge has a problem, maybe wire but gauge would be more likely.
Some models use reverse senders, so with wire unhooked and key on it will show HOT, then when wire is Grounded, COLD, that is fine as well, as long as you have full needle swing, gauge and wire are OK.

If gauge is good, hook sender wire back up and start cold engine.
Feel upper radiator hose at radiator end, should be cold of course

Wait 3 or 4 minutes, engine idling, and feel upper rad hose again, if it is getting warmer then thermostat is stuck open, you need to replace it with 192degF model.

Thermostat usually won't open for 5 to 8 minutes, depends on outside temps, so there be no circulation in the radiator until engine coolant temp gets to 195degF, radiator is there for extra heat, on some engines in the winter radiator barely gets warm, because engine block and heater being used cools it enough to stay at 195degF.

Running engine under 195degF costs you money because MPG is lower, it also lowers oil temp so less contaminants(water and fuel) can be burned off

Alright thanks! Grounded out the wire and the gauge went straight up, so it looks like I'm buying a 192° tstat tomorrow. A buddy of mine has been suggesting I get a 180° tstat, is there any reason that might improve performance? His gauge(he has a '95 F150 with a 300 i6) reads low due to that thermostat I believe, but he likes it like that because it makes him more at ease with what the engine's doing, where I like to know exactly what my engine is doing and have the gauge read correctly. It's annoying not having a tach for me, I want more information dammit!

Well sender could be bad, that's why you do the upper rad hose test, if rad hose stays cool for 5-8 minutes and heats up suddenly then thermostat is OK, and sender is probably bad.
One think about Senders, since you just did some engine work, people often use sealing tape on senders, you can but have to be careful, the threads on a sender are part of the electric circuit, so the lower threads MUST BE BARE, to get a good ground to the engine, if you put tape all the way down then threads have poor ground and gauge will not be accurate.

Lower temp thermostat can give you better performance, but of course lower MPG comes with better performance.

Colder air is denser than warmer air, so the cooler the air in the intake the denser the air in the intake, that was the point of CIA(cold air intakes) back in the '60-'70s, carbs sucking in warmed up engine bay air lowered performance.
Fuel injected engines all come with CAI from the factory.

One of the computer's sensors is the IAT(intake air temp) sensor, on a '97 I believe it is in the MAF sensor(if it's 6 wires IAT is there), if not it is on the upper intake.
The cooler IAT sensor the denser the air so computer adds more fuel for this.
Many may notice an engine is "peppier" in cold weather, this is why, and many notice lower MPG in the winter, this is why(along with ethanol added, lol).

So yes, 180degF can improve performance, but not that much, 15degF is not nothing but it ain't much either.
195degF engine coolant makes engine last longer and run cleaner, Ford and S.A.E.(oil guys) did that testing back in the late '70's, that's when Ford started switching over to 192-195degF thermostats.

A lower degree thermostat can't prevent overheating, an engine at 210degF is not overheated, and at 200degF both 180 and 192 thermostats are wide open, so............if temp goes up to 240-250degF it would do that with 180 or 192, or 160 t-stat for that matter, lol, cooling system problem doesn't care what t-stat you got

Alright, I'll do that test in the morning. I didn't pull any sensors or anything out of the manifold when I removed it, so it could just be dirty or something. I'll probably pull it and check it before I do that test. The gauge does come up, it just doesn't come up all the way, could that be caused by a dirty sender? Thanks for such detailed responses!

You did the test with the jumper to ground, sender works the same way as jumper wire.
Engine is the ground, sender is a resistor that loses resistance as it is heated up so it becomes a better ground the hotter it gets, and needle goes up.
If sender threads are not making good contact with engine, then you have a poor ground so needle doesn't come up to where it should because you have an extra resistor, the dirty or taped threads.