Replacing the spark plugs to solve my misfire issue, and this is on the #2 cylinder plug wire. What is it? Could it be causing a misfire? Its a little corroded from age it appears, I cleaned the leads with sandpaper.

What is it?
Do I need it?

 

This was on the car while it was being driven??

Its a spark tester, used to see if that particular cylinder is getting spark.

Its put in place and then removed after testing, so no it does not belong on there and yes it can be the source of your misfire.

 

Looks like someone forgot to remove it..hes^ right. its a spark tester.