if you have command trac, thats what i have and i have a 96 cherokee too, the manual says -
"to engage 4 hi, shift the transfer case lever from 2H to 4H while the vehicle is moving at any legal speed" an orange indicator light that says "part time" will light up on the left part of the dash. to get it back into 2H when you dont need 4WD anymore just reverse the directions.