I would say that the problem is boredom and frustrated energy more than a respect issue. Lunging might help, but in a small muddy area is just as likely to lead to injury. I don't know what you are feeding, but if he is not getting enough exercise, a reduction in concentrates often works wonders on the temperament. Increase the low protein feed to compensate - eg a low protein grass.

The other thing to bear in mind is that you are effectively his "herd". A dominant horse will stand squarely facing a delinquent and drive them away when the behaviour is bad, and will continue to drive them away until signs of submission (lowered head and neck, mouthing) are shown. The signal to allow the horse to return to your space is to turn sideways to him, or turn your back - don't look directly into his eyes. Any repetition of the bad behaviour repeat this process.

Do try to find a way to step up his exercise routine however, and I believe this is the major cause of his behaviour.