I am assuming by "is it plausible" you are wondering if it this species can occur by natural selection. The snide answer is "anything is possible, as long as it is evolutionarily favorable," but the more complicated reality is that "is it possible" calls for a justification of how it could happen. That could be more difficult.
From a biological perspective, you really have two different body types, which are at least as different as male and female in H. sapiens. That's a strange balance. You'll want a justification for why they stay in balance. You mention their history, but you're going to want to go into pre-history. How is it that, for millions of years, both body types were evolutionary advantageous enough that one type did not completely replace the other due to being more fit.
One answer might be location. Consider H. sapiens. Scientists steadfastly refuse to use the term "subspecies" to denote race, because the term "subspecies" comes with far too much baggage, but we can look at it that way ("Subspecies" is actually a very poorly defined word in science, referring to rather arbitrary distinctions. Within a species, scientists don't always agree as to which lines to draw to create subspecies). So, without stepping on too many toes, I'd suggest looking at our races as prior art. The most obvious example is the amount of melanin we find in those societies which stayed in Africa versus those which moved to Europe. In Africa, there was a massive survival boon for having dark skin to protect against the scorching sun. In Europe, that melanin was far less valuable, so not worth the metabolic cost to produce, so skins became lighter.
If we look at our own history, we see that such tiny changes in genetics were more than sufficient to justify desires for slavery. Many efforts, such as Phrenology, were developed to further justify this by demonstrating particular races were objectively inferior, though we now find all of them to be totally bunk.1 If such small changes were sufficient to justify slavery, it would not be unbelievable for larger differences to do the same. All you would need is to define what environment lead to the tentacled and hairy races/subspecies to develop their distinctive features.
That approach calls for segregation, and differences in environment. Another approach might be collaboration. In the second paragraph, I mentioned that this balance was at least as strange as the balance of male and female in H. sapiens. Think about it... how the heck is that balance valuable in our species? The answer is that the male and female halves of our species work together to solve common problems. They are specialized in ways which dovetail nicely to solve the greater issues of how to propagate a species. Neither side takes over because the ideal answer is a balance, not a domination.
Of course, you want domination, so we may need to come up with a less equitable balance to support your culture. As a hypothetical, what if your tentacled race expressed genes in a visible way, perhaps in the shape of their tentacled features, which would otherwise be hard to see.2 The colors and twists of the tentacles might act as a living microscope into the genetics of the individual. Control of this would be to peer into one's own genome itself. It would be a powerful tool for a powerful race, and rapidly promote the enslavement of one half of the species. As a neat added bonus, an enslavement of this sort would be an incredibly dark societal structure. To keep such a culture running, there would need to be an equally incredible lightness somewhere in the society. You, as the creator of the world, could put said lightness wherever it is convenient for your story.3
As a final thought, mitochondrial DNA is a very hard place to store such a fundamental division in a species. It evolves very differently than the rest of the DNA, as it is basically an asexual selection process, with no mixing from the male side. Thus it would evolve much slower. Instead, I'd recommend relying on a hormonal solution. As the baby grows, the mother releases hormones that lead the embryo to settle on one subspecies or the other. You could set it up such that too much or too little hormone would be fatal, making it very difficult to artificially select a subspecies by injecting hormones. This would be a delicate balance of the mother's body listening to that of the gestating child, and adapting her hormone secretions to match. Frankly, when you look at how a mother's body cares for her child's body in womb, this would not be all that far from the truth. Frankly, it's magic, and I'm happy to leave it that way.
1. I was going to say we found all of them to be totally bunk, except "white men can't jump," because that's the truth, but folks like Patrik Sjöberg demonstrate that it's not people with my skin color that can't jump... it's just me. Maybe I should, you know, practice or something.
2. Why have the tentacled one express this? Anthropomorphic bias. As someone that looks human, the tentacled one is "the other side." For a fun mental challenge, flop this around, and have those hairy apes express the genes and see what the tentacle side does with said power!
3. Or, for a twist, make this power into the lightness. If there is an even darker force threatening the species as a whole, this might be the lightness. This could lead to a tremendous amount of pride in the tentacled ones as they manifest what will save the essence of their species. Just as an alternative to the, you know, slavery and prostitution and all.
