Just because you're his girlfriend doesn't mean it's your right to see his phone. I never showed my phone to my exes, not because I was doing anything I shouldn't have done but because it's personal stuff and meant for my eyes only - would you expect him to let you read his emails, or be comfortable letting him read yours?
It's very easy to overreact and imagine things that aren't there when you're so emotionally involved in a situation. Try and put this in perspective: he's been with you for two years and (I assume) been committed and not given you any reason to suspect him for the duration of your relationship. He rejected the advances of this girl when you first got together, which should be encouraging. Has he given you any reason to believe he would cheat on you with her now?
Also, remember that exes can still maintain mutual, platonic friendships. Would it really be such a bad thing if he saw her? I agree that he should let you know if he does see her, but bear in mind he is not necessarily cheating on you. You do not even know if she is single or not or whether she still likes him, so she may not even be a threat.
I agree with the suggestion that you should talk to him about it, especially if it is bothering you. Ask him if he knows his ex is working locally, and how he feels about that, etc. Good communication is the key in any relationship. However, don't jump to any conclusions, and try not to be possessive or jealous, as this may push him away - especially if he has done nothing wrong.
Lex