Hi,
1) As the letter was written in French, I couldn't read it.
If we interpret the word As to mean because, we establish that letter had been written before it was read. Therefore, there is no need to use the past perfect tense.
However, please note that as could also mean at the same time, so be careful. For example, the following sentence is ambiguous because we don't quite know how to decipher its intended meaning (i.e., time related or because):
As Tom reached for the dish, the dog bit him.
2) Because it had been written in French, I couldn't read the letter.
In terms of using an appropriate verb tense, this sentence is fine too. Some people would not mind using the pronoun before its associated noun, but I would reword it as follows:
Because the letter had been written in French, I couldn't read it.