If I form a sentence like:
I could read the book if I hadn't wasted my time.
Would it be considered a past perfect sentence with the part I could read the book being in simple past for context in the sentence or does it only show a possibility?
Your sentence is grammatical as written but to make it grammatical the meaning may or may not need to be changed from your original intent.
Suppose you had been given several jobs to get done earlier in the day but instead of doing them you wasted your time. Now, later, you wish to read a book but because you had wasted your time earlier you must spend your time finishing your assigned chores instead of being able to read your book. So you say,
Your example is not grammatical.
Let us reword your sentence as follow:
Now, it is clear that the sentence consider an imagined situation (If I hadn't wasted my time) and the possible result of this situation (*I could read the book.)
In other terms, your sentence is a "conditional sentence."
In this light, you have to follow the rules governing the associated grammatical structures, which in your case are referred to the third conditional.
We use the third conditional when we imagine a different past, where something did or did not happen, and we imagine a different result.
The form of the third conditional is the following:
That said, your sentence does not follow the above rules and it must be rewritten as follow:
Reference: English Grammar Today, Cambridge.
No, it has to be:
Because you need both halves of an if–then construct to show up in the same perfectness, so to speak.