This is a great example for an abscess in a place you would not usually find one. Pain, heat, swelling, softness on palpation.
The best way to go about this is to ultrasound, needle it (poke it with a needle and and syringe, in a sterile manner), and surgically open it, flush it out and leave a drain in. I would keep flushing with diluted betadine.
The key is to leave the drain in (about 2-3 days) enough time for the pus to drain out and keep flushing the pocket with the diluted betadine for a couple of days afterwards (5-7days).
Make sure that there is nothing still in there and be sure to poke in there to see how far and deep it really goes (in a sterile manner).
Antibiotics can be given 5-7 days. 5 days of Procaine Penicillin, IM, Would probably be enough.
monitor the horse for fever and malaise in next couple of day and make sure that he has enough fresh water around.