Here I come to the recue!
file() reads a file into an array, each element is one line of the file.

Code:
<?php
	$filearr = file("filename.txt");
	$arrlen = count($filearr);
	$matchvar = "hello";

	for($i = 0; $i < $arrlen; $i++)
	{
		if($filearr[$i] == $matchvar)
		{
			$found = $filearr[$i];
			$foundnum = $i;
			break;
		}
	}
?>