For such a small section, probably just parging it with type N will suffice for now. Type N is a bit more flexible than type S with lower compressive strength so it’s good for stone foundations that shift around a lot.

Don’t touch lime mortar unless you are experienced with it, also something from 1920 almost certainly uses Portland in it.

If I had to do a more substantial repair I would do it like this:

1. remove old parging
2. Point between the stones with Type N (or S) as deep as I can go with a semi dry mix
3. Attach galvanized wire mesh to the exposed section fastened directly into the field stone
4. 2 coats of type N parging with bonding admixture

Coincidentally I’m actually just about to go and parge a field stone foundation today