Yup, chaser would be best. But it isn't a highly stressed fastener, so a die would do as well, if you get it started right and have room to swing the wrench.
MMC has sets of just chaser dies for about $10, or Sears has a full set of chaser taps, dies & files for about $50. They are really handy when access is limited, since they are designed to turn with the same wrench or socket that you would normally use.
Probably a good idea to pick up some cutting oil as well. Home Depot sells it in the plumbing department (used for power threading iron pipe). It will make the chaser easier to turn, and help it last longer.