That tee should unscrew from the block, after you unplug the air lines. Push on the little ring, pushing it towards the threaded part, while simultaneously pulling on the line. It will pull out, if you do it right.
Then, get a 1/4-inch compression fitting with a threaded male end, to connected the air horn line to the opening where you removed the tee.
In the alternative, you could simply cut the air seat line and cap it off with a 1/4-inch compression to 1/8-inch thread fitting...then cap the 1/8-inch threaded part.