Oh, my. That one was loved to pieces.
How about just making a new one that feels as nice and just put it where he can find it. MAYBE he'll eventually adopt it.
Would he consider letting you make the blanket into a quilt for a teddy bear or other stuffed toy?
My grandkids seem to like stuff they think they are finding better than stuff that I directly hand to them. Example - spirograph game - which I had no intention of letting them play with, but it was out and they found it - and they seemed to have fun with it. (Ages 5 and 7 and 7)