Hi Cam,
Your current setup is fine (once you add a copy of the Rails app onto the database server) - especially if you’re using SQL-backed indices, because then Sphinx doesn’t have as much network overhead when it’s talking directly to the database.
If you’re using real-time indices, then it’s up to you. It might be more a matter of balancing the resources needed - I feel like the app server could be more demanding, so keeping things as you’ve got now is perhaps best? Certainly, I’d start with that and see how things go.
Cheers
—
Pat