Depends how proficient you are with plastering or filling.
I would start by peeling off more wall paper beyond the damage.
It's tricky to judge the maximum depth involved here, but it could be done in two lots.
Preparation is key. You need to ensure there is no loose plaster or masonry and that any damp is dealt with.
If you are confident with skim coat and a float trowel, you could do that.
I've had a lot of success with Toupret filled slightly proud, then sanded down when thoroughly dry with sandpaper wrapped round a block. Or a ⅓ sheet sander, if you have one.
Repeat the filling and sanding process if necessary.