A good friend of mine lost his father a year ago today. I did not have the chance to meet his father, but he was obviously a great man. What can I say to let him know I am sorry for his lost and he is on my mind?

Don't try to think of the "perfect" thing to say or be "flowery." Just say exactly what you posted, that you know today is the first anniversary of his death and that your friend is very much in your thoughts.

You can also say something like 'I'd love to hear all about him.' That gives a chance to release feelings, sad and happy.

"let them know they are in your thoughts" You said it!
"I want to let you know you and your father are in my thoughts" Is usually what people say as a general condolence, though you seem to care more than just that, and I think the suggestion of asking your friend to tell you about his dad is a really good idea!