Spray electrical contact cleaner directly in the space indicated in the picture for several seconds, moving the scroll wheel back and forth as you spray.

Once the cleaner spray has evaporated, you may try connecting the mouse to your computer for testing before reassembly. You may encounter odd behavior if you leave the PCB in the shell disconnected while doing this.

If several repetitions of this step are not effective, the rotary encoder may be permanently damaged. Consider replacing it or the entire mouse.