Your photo seems clear enough. Either the wire to the solenoid is too short and stressed or the last guy that worked on it sloppily overtightened the mounting nut or misapplied the wire in the ring connector. Replacing the connector, with the correct wire size ring, should be all that’s necessary, aside from double checking the other connections. Make sure as you tighten down on the ring that you keep the wire lined up so it’s not turned to stress the wire again.
Be super slow and careful with wrenches in a tight area, though; it’s easy to accidentally short across to a ground, sparking in your face and burning up a component. Consider disconnecting the chassis battery bank temporarily.
Joel