If he's an older horse I wouldn't start lunging him straight out. Hand walking up and down hills will greatly assist in getting his fitness up and strengthening his muscles and ligaments again.
Short walks out on bitumen surfaces are good as well for strengthening ligaments and tendons - but don't over do the work on hard surfaces as too much can cause injury particularly in an old or young horse.
From hand walking, I would start to do some in hand yielding exercises to start developing a little more flexibility and suppleness through his body. So start with yielding his hind quarters so that he is performing a turn on the forehand in hand. Then yield his shoulders to have him do a turn on the haunches. Small amounts of rein back, particularly up slight inclines are great for strengthening the back and hindquarters.
I would then start getting a saddle on him, and doing a few sessions a week of walking just like you did in hand. The walk must be forward and active to be of any benefit.
Continue walking and in hand exercises for at another 2 weeks before introducing the lunge. Small periods of trotting on a large lunge circle (preferable 20m or bigger), doing lots of walk - trot - walk - halt transitions. The same under saddle, keeping all of your work to straight lines and large, sweeping curves. No tight turns yet!
Gradually increase the amount of trot work you do, start to add more transitions under saddle and introduce small amounts of leg yield in walk and trot, and some large, 3 loop serpentines.
Don't introduce canter work too quickly, canter is strenuous so can cause injury if the horse is not conditioned particularly if he is an older horse. When you do introduce canter, start it on a nice wide 20m circle, canter 1 circle, trying to stay off his back in 2 point, and then back to trot. Just sprinkle your canters into you sessions with him a couple of times a week, and as with the trot, gradually built it up.
I wouldn't be doing a great deal of lunging with him. Lunging is a high impact exercise especially when conducted on a circle smaller than 20m. In an older horse, or a younger horse, this can cause serious injury to the soft tissue and bone structure of the legs and back.
Riding and hand walking is a much better way to build up fitness and strength :)