Fiber-reinforced plastics (FRP) are widely utilized in high-performance applications due to their superior mechanical properties. However, their susceptibility to internal defects requires advanced structural health monitoring (SHM) techniques. Traditional non-destructive testing methods have limitations in real-time and localized damage detection as well as limited textile processability. This study explores the development of textile-based coaxial sensor fibers for in-situ strain and damage monitoring within FRP structures and potentially also for Smart Textiles applications using Time-Domain Reflectometry (TDR). A round-braiding process is employed to manufacture coaxial sensor yarns. Two design approaches are investigated: the first approach involves local dielectric defects for pressure-induced impedance changes, and the second approach uses stretchable textile materials in a coaxial yarn configuration to detect localized strain variations. Electrical connection strategies are evaluated for signal integrity, and experimental TDR measurements confirm the feasibility of both approaches in detecting localized strain and damage. The findings establish a foundation for cost-effective, real-time SHM in FRP, potentially enhancing the reliability and longevity of composite structures in aerospace, wind energy, and automotive applications. Future research will focus on refining the sensor design and optimizing signal processing for improved sensitivity and resolution.