Archival thread, cloth, for book repair

Cloth for bookbinding: I recommend unbleached muslin because the bleached muslin is acidic. Unbleached muslin is a standard spine liner and can be used for book-cloth too. Many beautiful book-cloths are made of silk or linen. I really like the Italian linen Canapetta cloth because it is more forgiving than many other book-cloths.

Thread for bookbinding: Linen or cotton thread are both fine. In general you will want something that can stand up to being tugged without breaking.  Waxed linen thread is only used for craft bindings where the sewing is seen or for end-bands. I don't want this to be confused with just waxing your sewing thread to keep it from tangling by running it through a chunk of beeswax (which is fine).

Some of the best bookbinding thread is polished which gives it a sheen and helps keep it untangled. Three ply is pretty standard. The thickness of the thread is hugely important if you are re-sewing a book entirely because you need to account for the swelling of the spine due to all the thread that is added. Sometimes this means you have to sew "two-on" to avoid making the spine too thick. That is an advanced sewing technique for another time. 

Using a needle with a large eye just saves a headache. Darning, Beading and Upholstery needles are the place to look for the best bookbinding needles.