Problem is my supervisor listed himself as the formal mentor and is now taking most credit for the project. How do I handle this situation? Do I talk to the person directly and express my concern?
Don't say anything until your answers to the following questions show that doing so would produce some clear benefit for you (and getting it off your chest isn't necessarily a clear benefit):
What would you potentially gain by confronting your supervisor on this?
What could you potentially lose?
STFU and learn to never give up my ideas again?
Given the uneven power dynamic at play (untenured you vs. department head) and (I suspect) the lack of a substantive benefit from a confrontation, I'd go with the STFU option.
Can I at least include this in my tenure portfolio to make the best out of the whole thing?
If you had no direct responsibility/status on the project, it might seem odd to include it in your tenure packet. Do you have an e-mail or anything in writing that demonstrates that the student and/or supervisor based the project on your work?