The farther towards the edge of the world you are the more chance of level 2 spawns, and only at night.
The second the sun hits they run off and disappear. If you are lucky enough to see a level 2 wolf, you need to get it stuck in a pit or something as soon as possible before the sun comes up. You might want to be pre-digging pits in case you run into one.
Then you need to wait by it for maybe hours while feeding it. If you go into a portal, die or leave before its tamed it disappears. You will want to breed it on the spot and not move it, they easily aggro things and get killed.