My question was indeed close to duplicate as was hinted by @Werner .
For the sake of reference I provide the code, which draws what I wanted. The code was created after analyzing the answer, linked by @Werner.
\begin{tikzpicture}[baseline=(current bounding box.center)]
\matrix [matrix of math nodes,left delimiter=(,right delimiter=)] (m)
{
\!1 & 0 & 0\!\!\! \\ \!0 & {P_\theta \otimes P} & 0\!\!\! \\ \!0 & 0 & 0\!\!\! \\
};
\draw (m-1-1.north west) -- (m-1-3.north west) -- (m-3-3.north west) -- (m-3-1.north west) -- (m-1-1.north west);
\end{tikzpicture}
The following code should be included in the preamble.
\usepackage{tikz}
\usetikzlibrary{arrows,matrix,positioning}
This gives the following.
