Perhaps this —
x = (0:10);
y = rand(11,2);
figure
plot(x, y(:,1), '-g', 'DisplayName','$i_a^{true}$', 'LineWidth',2)
hold on
plot(x, y(:,2), '--b', 'DisplayName','$i_a\ for\ \widehat{r_l}=1.0$', 'LineWidth',2)
hold off
legend('Location','best', 'Interpreter','LaTeX', 'FontSize',14)
For the hat, you can use either \hat to give or \widehat to give the result as showin in the legend. (They actually look different in the legend, although not in the previous sentence.)
.