You probably can not use the 360 controller on Morrowind, it did not exist when the game came out. You might be able to use Xpadder to get it to work, but I have not seen any success with that.
Your best bet is to use an original Xbox Controller, if you have one that will connect to your PC, or use one of these
http://www.newegg.com/Product/ProductList.aspx?Submit=ENE&N=100006874%2040000123&IsNodeId=1&Description=gamepad&name=PC%20Game%20Controllers&Order=BESTMATCH
Just research them to see which one offers the most compatibility with the original Xbox.