I have to agree with QH re that particular blanket. A hole like that in the wrong place under a saddle could make an uncomfortable spot on the horse's back. Especially since many older saddles have worn-out fleece on the skirts. I'd go out and buy a 5/8" or 3/4" wool felt or mohair pad and cover it with your blanket, for looks. Fold your blanket so the hole doesn't show.
I also agree with WN that if your saddle fleece is in good shape and it fits your horse properly, even an old army surplus wool blanket folded double will work fine. Not very pretty, though.