Looking at that I would first and foremost get a vet out to see about an Xray (first) to see if there is an underlying issue that is beyond help. If that is clear, have the vet think about debriding it which will involve freezing it (as in local anesthesia) cutting out the proud flesh and inappropriate scar tissue and then treating it with powdered alum (to keep the proud flesh at bay).
If the coronary band is damaged, it may be too late.. but time will tell. If you need to cover it (I hate to when Proud Flesh is involved), look at using sanitary napkins to hold the medication on the wound (after the vet care) and cover with vet wrap. You may need to see if you can get silver nitrate sticks to kill the proud flesh back if you have to cover it (at least that is what us old tymers did).
This might be OK. Might is the operative word. Get an Xray first... and a little vet help. If the Xrays are NG, then putting the horse down may be the best bet for the horse.