Yes, you can.
1. Install Windows98 on the first drive.
2. Format the second drive from Dos7 command prompt, using the /S switch to transfer the system files after format. Then copy all the Dos 7 files into a directory in the drive, for example, C:\DOS. And finall you can create the autoexec.bat and config.sys files manually.
Important :
FDISK will not allow setting the partition active on any drive other than the first as informed by bios. Meaning, if there are 2 drives installed, FDISK will only allow to set the patitipon active on the primary ide. If the partition is not active, the drive will not boot even if the system files are present.
To circumvent this,
a. Use a third party partition managers like Cute Partition Manager, Ranish Partition Manager or Partition Magic to set the 2nd drive's partition active, where dos is installed.
b. Or install DOS7 in the first drive.
To prevent Windows98 installation problems, install Windows98 separately while the power to the other drive is disconnected, if DOS 7 is already installed. If doing a clean install, then it can be installed without doing anything first.
One of my setups previously:
IBM DOS 5.02 and hard drive size