Step 1: Understand codominance.
In codominance, both alleles contribute equally and visibly to the organism's phenotype, unlike incomplete dominance where the phenotype is an intermediate blend.
Step 2: Review the options.
- The 3:1 ratio is observed in incomplete dominance, not codominance.
- The 1:3 ratio is incorrect for codominance, as it does not apply to F2 generation.
- The 1:2:1 ratio is characteristic of codominance, where both alleles are expressed equally in the phenotype.
- The 1:1 ratio is seen in monohybrid crosses with a dominant and recessive allele, but it doesn't apply to codominance.
Step 3: Conclude.
The correct phenotypic ratio for F2 generation in case of codominance is 1 : 2 : 1, making option (C) the correct answer.
Final Answer:
\[
\boxed{\text{1 : 2 : 1}}
\]