It looks like you dropped stitch is in an area of maybe stockinette and reverse stockinette stitch (possibly some seed stitch?). You're going to have to change the way you pick up the sts so that they follow that pattern. This aritcle
may help with orienting a crochet hook (or your knitting needles if you're using them) so that the dropped stitch blends in. Don't worry about loose yarn on either side of the dropped st, that'll work its way into the fabric itself. It's worth another try or two but you may wind up having to rip back as claire suggested.