wait and notify operations work on implicit lock, and implicit lock is something that make inter thread communication possible. And all objects have got their own copy of implicit object. so keeping wait and notify where implicit lock lives is a good decision.
Alternatively wait and notify could have lived in Thread class as well. than instead of wait() we may have to call Thread.getCurrentThread().wait(), same with notify.
For wait and notify operations there are two required parameters, one is thread who will be waiting or notifying other is implicit lock of the object . both are these could be available in Object as well as thread class as well. wait() method in Thread class would have done the same as it is doing in Object class, transition current thread to waiting state wait on the lock it had last acquired.
So yes i think wait and notify could have been there in Thread class as well but its more like a design decision to keep it in object class.