Go to Tools>Geographic>Select Geographic Coordinate System in order to open the dialog. From there, choose the "From Library" button and select your coordinate system. I have only used the Projected>North America>United States>STATE systems but they have all showed up correctly in google earth. All of the systems that I have experience with use "US Survey Foot" as the unit. It is possible that only systems using that unit will work but I cannot confirm.
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