Reading classical history is a plus. Thanks to the Penguin Edition, you can get Livy, Tacitus, Herodotus and Xenophon translated into English. They're all worth a read. "Billthedrill" and I have had many a good chuckle at Livy, who quotes huge speeches by famous men that he was never alive to hear.
I'm trying to come up with a list similar in spirit but incorporating authors Jefferson couldn't have read or who were nearly contemporary. Gibbon would be one, certainly. As someone pointed out above, Machiavelli, especially the Discourses. I'll have to give the rest some thought.
He's probably right about two hours of exercise a day, but it's a lot more difficult to attain these days. Riding was for him a form of transportation. Shooting was something you could do on the back forty. Personally I do get in an hour of walking a day, and lately with the snow, falling down and getting up again is good exercise... ;-)
I think the Loeb Classical Library editions are a better investment: reasonable translations facing solid (but usually not definitive) scholarly editions of the original. Sometimes you'll want another translation (e.g. Fagels for the Odyssey and the Aeneid) as well, but overall, you can't go wrong with the Loeb editions.
It is a pity the kids don't get at least Latin and a few years of Greek anymore, but I would settle for a curriculum that was solid in translation of the Latin and Greek philosophical, historical, and literary work, and included the kind of grounding in the history of the Roman republic that the founding fathers got. If I had to scrimp anywhere in history, I think I'd go light on the middle ages, but with the resurgence of radical Islam, perhaps more attention needs to be given to the fractious response of the Christian Near East and North Africa to the rise of Islam.