if you want to do it exactly the same way it was, you’ll need to find some calcium hydroxide power (called lime), empty it into a bucket and keep it in excess water for a week, then mix the resulting putty with sand 1:3 ratio, add in hair or synthetic fiber for reinforcement and apply it to the wall just like they did a hundred years ago. then spend the new few days spraying it to make sure it doesn’t crack as lime plaster tends to when it dries out. on the bright side if you do it right this mix will be quite resistant to damp

however if you are in america you will not be able to find a single contractor who knows how to do this for reasonable money, so a drywall patch is the practical choice. here in europe we also have very cheap gypsum plasters like knauf goldband which could go into this hole easily, but they aren’t as damp resistant as the old stuff, which is also more expensive here