if/when ND gets, Purdue could be their protected inter-divisional rival. However, if you have 16 teams divided into two 8-team divisions, you are only going to get two (9 minus 7) against the other division each year, your protected rival and one more. So, I still think four 4-team divisions is the way to go with 16:
2x8
North: Iowa, Michigan, Michigan State, Minnesota, Nebraska, Northwestern, Notre Dame, Wisconsin
South: Illinois, Indiana, Maryland, Ohio State, Penn State, Purdue, Rutgers, team-16
4x4
East: Maryland, Penn State, Rutgers, team-16
North: Michigan, Michigan State, Notre Dame, Northwestern
South: Illinois, Indiana, Ohio State, Purdue
West: Iowa, Minnesota, Nebraska, Wisconsin
Every year you play your own division (3 games) and one of the other divisions on a rotating basis like the NFL (4 games). That leaves a couple games (one each) against the other two divisions, including one against a protected rival, if you have one: (Illinois-NW, Indy-MSU, Mich-OSU, ND-Purdue)