What a find! He is your soldier, and of course you should do whatever you like with him, but before you restore him consider what he represents in his current form. First off, I admit that I am a hopeless sentimentalist.
One of my neighbors once gave me a couple of Grey Iron doughboys she had found in the dirt under her porch. I’m a Britains guy, but I love these two battered toys. Back in the 30s or 40s some kid was playing with them when his mother called him in to dinner. They didn’t make it into his pocket, and so they lay there for decades. I don’t know who the kid was, but I have his soldiers and he was definitely my kind of dude! Your soldier has the same story.
Robert Louis Stevenson wrote a poem called The Dumb Soldier about this (apparently universal) phenomenon. The narrator finds and old toy soldier he left in the garden years before. Here are a couple of stanzas:
He has seen the starry hours
And the springing of the flowers;
And the fairy things that pass
In the forests of the grass.
Not a word will he disclose,
Not a word of all he knows,
I must lay him on the shelf,
And make up the tale myself.