Hi,
That looks good. Do you know what species? Some are toxic to fish, I found a 'safe to use' list when I Googled, most UK hardwoods are OK but best to check. Conifers are not OK (which that clearly isn't). If the species is OK 'd then see if it's rotten all the way through or not, if it is it's probably not worth bothering as it'll disintegrate fairly quickly. I found beech and birch became rotten really quickly with fungus right through but oak weathered on the outside and stayed rock hard inside (see my effort on 'Journals' for oak I collected in my tank).
Prep is up to you, I just wire brushed any loose wood and crap off and then washed it and cut to size. To get it to sink you can soak and/or boil it or I ended up fixing it to a plastic chopping board and weighed it down.
HTH
Cheers
Dave.