I'll assume you already figured out how to read the temperature.
For the watchdog part, you need to configure the watchdog, and Whack the dog every so often. So if the temperature is less than or equal to 38°, whack the dog. Otherwise you don't. The reset will kick in however many seconds you configured after the last time you whacked the dog.
But is there a reason you want to use the watchdog? If you just want to reboot if the temperature is greater than 38°, just read the temperature, compare, and run the Reset System.vi if it is True.