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Does the transfer case have a manual shift lever with a neutral position? If not, it is unlikely to be towable as is and may need a drive shaft disconnect. My recollection is that Explorer Sports of that vintage have the pushbutton 4WD switch and thus no way to put it in neutral.
Not sure of that vintage, check with Ford. My '06 has that same pushbutton switch setup and pressing and holding the 4X4 pushbutton is how you set it up to tow. You will need a Ford Neutral tow kit. Ford dealers can install and program the kit.
I place shift lever in neutral, turn off the key, hold brake peddle down, hold 4X4 pushbutton until tow led lights up. Ready to go.