First, soak it with PB blaster for a few hours.Then use an ez-out to try and spin the brass nipple out of there.If it feels like the EZ-out is going to break, heat the insert up nice and hot with a torch and try again.Failing that, use a small hacksaw blade to cut notches in the brass insert until you get down to the steel threads it mates with. Then pry the pieces out with a screwdriver.
Tried an extractor that was tapered but the hole isn't deep enough to allow the extractor's wider part to contact.For the hacksaw / notch option, the I.D. is really small and I'm not sure we'd be able to get enough depth or angle to cut notches.What about driving a screwdriver in that's just wide enough to cut into the brass, but not too wide to damage the threads ?
I'd drill it through for the extractor.1/4 NPT taps are not expensive. You could drill it out up to near the threads then use the tap to clean it up.