I think with that large a tear I would resquare the quilt, an inch or whatever is needed all around, and then rebind it. You might want to mark whatever measurement in from each side of the quilt, attach your binding using that marking, and then cut off the excess.
I'm assuming that is a solid border.
I've also seen appliques used to cover a tear, but I don't think that would work in this spot.
Hope this helps!