Your almost 8 year old is using the small muscles of his hands for doing many tasks. His hand-eye coordination is becoming even more refined. He does model-making, painting, drawing and craft work. His ability to use a pencil, brush or other tools has improved and will be interested in doing tough projects. While holding the pencil, he is now moving his fingers to write and draw easily. He correctly writes most letters that move from top to bottom and from left to right. He will gradually write smaller letters that are spaced properly and on the line.
What you need to do
To facilitate building of his small hand muscles, let him work/play with dough. By squeezing and stretching it will strengthen his finger muscles. Touching also provides sensory experience. Finger painting is another way to improve hand eye coordination. Squeezing water out of sponge and putting water in a bowl. This simple game strengthens hands and forearms.
Another way can be working with broken crayons. He will be able to hold it correctly between thumb and forefinger. He can also make crafts like making a paper boat, a greeting card, etc where he cuts and folds tabs, thereby strengthening his hand muscles. With the help of scissors he will cut irregular shapes and paste them properly. He will touch and work with a variety of textures and hold objects using his hand confidently.