If you have channel locks, you can try to gently get it centered and get it back in.
The piston has to be skewed to the side by a degree or two.

 

Or as a last resort, start the truck and gently apply brake pressure and blow the piston out of the caliper.

 

I managed to finally get the piston back in, thank you for all your help. I took the piston out and cleaned everything. However, I think the problem was that the piston was pushed out at a weird angle after I pushed the outer piston in (if that makes any sense). Once I angle the piston correctly I was able to push it in quite easily.

Now the brakes feels like mush though, looks like I am going to have to bleed the brakes :/

 

Make sure the seal in that calliper is not damaged.
Or you'll have streaky wheels with brake fluid on the wheels.

 

Could that be a cause for the loose brake pedal?

 

rebuild the caliper or get a rebuilt one. the reason I suggest that is:

1. the piston would not collase/never a good sign
2. your piston was cocked on the bore/ not a good sign
3. you popped the piston out of the bore/probably cuasing damaging the o-ring trying to get to back in.