I assume that $S^1$ inside $S^3$ means some great circle of $S^3$, i.e. if
$$S^3=\big\{(x_0,x_1,x_2,x_3)\in\mathbb{R}^4\ \big|\ \sum x_i^2=1\big\}$$
then $S^1$ is for example $\{(x_0,x_1,x_2,x_3)\in S^3\ |\ x_2=x_3=0\}$ or any other combination of coordinates with two of them being $0$.
We most certainly cannot treat $S^1$ in $S^3$ as any homemorphic image, because the result then depends on the choice of such embedding.
If that's the case then we can apply the stereographic projection to $S^3\backslash S^1$ relative to some point in $S^1$, to obtain that this space is homeomorphic to $\mathbb{R}^3\backslash L$ with $L$ being a line, for example $L=\{(x,0,0)\ |\ x\in\mathbb{R}\}$.
And this space is homotopy equivalent to $S^1$. Indeed, we first construct a homotopy equivalence from $\mathbb{R}^3\backslash L$ to the tube $\mathbb{R}\times S^1$ via linear homotopy from the identity to $(x,y,z)\mapsto (x,c\cdot y, c\cdot z)$ map, where $c=1/\lVert (y,z)\rVert$. And then by contracting the $\mathbb{R}$ piece.