I currently just use this in my .zshrc:

alias ssh="kitty +kitten ssh"

sshpass() { TERM=xterm-256color command sshpass "$@"; }

Could also alias sshpass differently but I mostly use that for embedded devices where I just want a simple shell anyways.

The alternative you mean is in ~/.ssh/config:

Host *

    SetEnv TERM="xterm-256color"