Can two 500 GB external hard drives be used like a single 1 TB hard drive to use for Time Machine?
Depending on your system there are several methods to "concatenate" two or more external drives.


RAID0: diskutil createRAID stripe TMRAID JHFS+ disk1 disk2
JBOD: diskutil createRAID concat TMRAID JHFS+ disk1 disk2
CoreStorage: diskutil cs create disk1s2 disk2s2. A CoreStorage Logical Volume has to be created addtionally.
ZFS: This requires the additional installation of software. Link to Time Machine setup.
MHDDFS: This requires the additional installation of software. ~Setup link (I didn't test this solution as a Time Machine destination).


At the time of writing the new APFS (available in Sierra) apparently doesn't support Time Machine backups.



None of these solutions is recommended as Time Machine destination volume.


The survival probability of the 500 GB drives (I assume they are at least 3 years old) is low compared to a new single drive.
Since both drives are attached externally (via USB, FW etc.) the mechanical handling is error prone. If you detach any of the two drives accidentally while in use, you may loose the whole content because the volume usually is not recoverable afterwards.


I recommend to get a new single external drive (2 TB - 4 TB) which also provides some additional space to "breathe".