Till R2021a, the encoder block supports only encoders on motor carrier shield which is specifically for MKR boards and Nano 33 IoT board.
Motor carrier encoder block: https://www.mathworks.com/help/supportpkg/arduino/ref/encoderarduinomotorcarrier.html
Supported shields:
In R2021b, support for rotary encoder was added which can be used for all encoders on all arduino boards.