There's already military ranks. Militia commander, militia captain, sheriff, captain of the guard, hammerer, and champion. If you want certain dwarves to get better equipment than others than you can either put them in a high up squad, or assign them specific better equipment.
I know I know, I was talking more like a moral champion, you know a natural leader. Remember Troy? there was the king and generals, but everyone admired Achilles for his skills and charisma
Technically speaking, the existing Champion fits the bill. many players tend to select their best warrior for the role - often outfitting them with the best gear that can be forged by the smiths and better tombs and bedrooms than common footdwarves, and sparring matches with the champion are often observed by other active-duty soldiers, which may be part of their "build morale" responsibility. Additionally, the champion I notice almost always tends to have the best and most hardened warriors in his squad if you aren't the type to cycle men out to fill/lead other squads, possibly as a result of this mechanic and players' tendency to have their militia commanders lead the charge against the enemy - as I and others tend to make the champion out of the militia commander.
[NOW LET THE RAMBLE COMMENCE]
Although once the economy is brought back, I do like the idea of particularly notable soldiers receiving gifts from other dwarves, prompting a good thought for both parties
"Was elated/happy/satisfied/etc. to have his/her service to the fortress recognized with a gift." - More fame-seeking or greedy soldiers would likely get a stronger good thought. Depending on the gift and needs, it may also trigger other good thoughts (having a favored drink paid for, receiving a new amulet they can wear, stuff like that.)
"Was satisfied to have shown a soldier/great hero appreciation" - Traditionalists, dwarves who value sacrifice, and dutiful civilians would probably be the ones to get a thought about it (as dwarves tend to value martial prowess.) Civs that highly value martial prowess would also probably have other average joes do so because of social reasons. Maybe even have it count as helping someone for those sorts of dwarves, as they're helping reduce the obvious stress pile-up on the poor militia.
There's also the eventual implementation of relationships pertaining to jobs and such, so a soldier who is both a squadmate and friend is going to hit their pals much harder than just a friend or a random replacement. Officers with more "nice guy" tendencies may even garner stronger responses from his men if he's killed in battle. I imagine that generous types of officers would try to pay for the drinks and food of his squad at social stuff.
"was shocked/terrified/enraged at the death of a squadmate/shield-brother or sister/well-liked superior/great hero in battle," in addition to the usual emotional response to someone being killed in front of them. Cultures that value martial prowess or sacrifice may also see regular civilians mourn weapon lords and officers who fall in battle