What is the average temperature of air around steering rack? Can it be greater than 70 C ? Actually I have to put a sensor over there whose threshold temperature of working is 75 C.
I don't think you ought to be designing for average temperature--I think you're more looking for a peak temperature under expected conditions for your application.
Depending on atmospheric and driving conditions, the temperature could easily exceed 75 C (stuck in traffic in the summer, for example).
Many types of automotive wiring are rated to 80-125 C, you might use this as a reference point for suitability.
You could probably measure the temperature of the power steering fluid reservoir as a ballpark idea; that fluid is pumped through the rack and likely keeps it within 10deg.