I guess it should be "2", best should be used than better, in 1 & 3 them is redundant,

Of the people who brought about the Reformation, the religious revolution that grew out of objections to the doctrines of the medieval church, Martin Luther is the best known of them.

Is the answer 2 ?
here THE RELIGOUS REVOLTUION says more about REFORMATION - modifier

1) Martin Luther is the best known of them
Implies as if CHURCH name is MARTIN LUTHER

2) the best known is Martin Luther
CORRECT - says it all ... "Of the people....., , ... the best known is "

3) the better known of them was Martin Luther
Use of Comparative degree irrelevant here
SUPERLATIVE , best should be used

4) Martin Luther is better known
Use of Comparative degree irrelevant here
SUPERLATIVE , best should be used


5) the best known one was Martin Luther
ONE is not required


Hope that helps!