>>looks at photo

Yeah, your shifter housing has burst out of it's ferrule, You'll need to recut and recap that. Otherwise the housing will just continue to unravel and you lose shifting ability alltogether.
Prefferably recap with an aluminum or brass ferrule instead of another plastic one. (plastic ones eventually all fail just like yours did)

Also would be a good idea to replace the shifter inner cable at the same time, as it's probably been kinked by that 90degree bend your housing is making.

on second thought, just take it to a LBS (repair shop) the job is too likely to mess up if it's a first time thing for you.