Yes, this came up in a recent thread. I have round magnets from Aristo for this use. Many said they bought them at Raido Shack. They need to be set to one side or the other to trigger different sounds.
The case for the LGB magnet sits slightly above the rail, but the magnet inside would be just below the rail.
I would use a stronger magnet and place it on a tie, and the top of anything between the rails should be slightly below the rail head (1/64).
When cleaning track with an Aristo plow, or with a wide track cleaning device, the LGB magnets get hit and sometimes come loose and cause a major derailment. Also, the Aristo rerailer is above the rail head and causes problems.
I use the very strong magnets from scrapped computer hard drives.