I'd use the same thing for any dog who is fearful of any situation, that is desensitise and counter-condition.
You need to work out his 'flight zone' that is how close you can get before he is fearful. Stay well out of this zone and play with him. If he doesn't react then after 4-5 sessions (short just a couple of mins) be a bit closer. If he reacts just go back a step for a bit longer. Repeat until he is ignoring the sheep and you are close to them.
That's the process simplified. In reality you need to find a very very high value toy/treat- something that he will focus on to the exclusion of everything else- you may need to get inventive.. This toy/treat is ONLY used for this 'game'.
Short sessions 1-3 mins. Don't push him too much and keep him wanting more- end the game when he wants more, he should be really disappointed that you have stopped and want to initiate more fun. But do not start again.
If it was everything other than livestock- ie a random object or going in the car he was scared of, I'd start rewarding any time he chose to look at or touch the object. But you don't really want him trying to touch the sheep or stand next to them...
if you need more help them PM me!