That looks like really thin material. You may be best off to just sew the spot back together. A patch would be quite obvious unless you wore a similar color shirt under it. (Or do you have long enough hair that it would be covered?)
How far is that from the neckline? I'd propose a repurposing of the shirt... take the neckline down and you could make it totally 80's! Could also wear a tank top/spaghetti strap under it.
An example (this one is long sleeved, but you get my idea)
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