The story
The hairstyle itself has existed for centuries, coming in and out of popularity under various designations such as mouche, but the term soul patch dates to the 1980s and relates to its popularization (from the 1950s onwards) by African American musicians, especially jazz musicians: compare soul food, soul music, soul brother, and the hairstyle's alternative name, jazz dot.
Etymology from Wiktionary, CC BY-SA 4.0.