What to do with wires from old outdoor light?
There's two "proper" solutions. First, you could install a box rated for the location (dry, damp, wet). Terminate the wires in the box, and install an appropriate blank cover. 

The other option is to find where the wires originate, and disconnect them. Then you can either tuck the wires back into the hole in the wall, or if possible remove the wires altogether.