Can you use any type of wool for needle point or is there a special kind that you need to use?

Embroidery floss.

It depends on what you are stitching. You can use ordinary wool for cross stitch, but it needs to be the right thickness in order to go through the canvass.

Needlepoint is something different, and the yarn is finer. Go to your local (or nearest) craft store and investigate what's available. The staff will be able to help you with whatever it is you are trying to work on.