Both are "correct" because native speakers use both. But if you want to follow the rules, then: "If only he WERE here." He is NOT here, so the rules (especially in American English) call for the subjunctive: If I WERE handsome, I would have many girlfriends. (But I am ugly, so ...) If Tom WERE intelligent, he would have a good job. (But he is not intelligent, so ...) If everyone WERE nice, this would be a wonderful world. (Of course, many people are not nice!)

I don't believe in prescriptive grammar, so the only "rules" for a language are how the language is currently used by native speakers. In this case, both are widely used and widely understood. "If only he were here" is more formal, but the subjunctive is largely archaic in English, and I think just as many people (or more, depending on the area) would say "if only he was here". In the end, I don't think anyone, except grammar nazis, would correct you if you used either in conversation. For writing formal documents, "were" would be slightly preferred.

If only he WERE (subjuntivo) here.