You can just let the stuffing go. Let him be a shell.
I wouldn't try to resew with new fabric, he will lose who he is.
I took teddy to college
We have my old stuffies, about 4 of them, Teddy included, and my husbands one teddy bear on the rocking chair in our room.
Be sure to read "The Velveteen Rabbit" to Patrick.
Here's our Lovey story.
My daughter has Lovey. We lost Lovey in a hotel once and she was traumatized, as traumatized as one gets at 2 1/2 without one's lovey.
SO We called Walmart and made sure they still carried him. We then took our daughter to go find Lovey. I removed all the other boxes with Lovey's except one, put them on the high shelf. THen put Lovey front and center at her level. She was in the other aisle looking for Lovey with Daddy. I called Oh I found him, I found him.
For a long time my daughter thought Walmart was the Lovey hospital. She still sleeps with him, and she is now 17.