Place your ruffle on top of the rectangle with the right sides together. Line up the stitching where you ruffled just below the hem of the T Shirt. Pin this ruffle in place; and don't go stingy on the pinning! Its better to have a few too many than a few too...few.
Here's what it should look like pinned:
(Okay, I also linked up to Craft Spot Challenge found here but I'm having issues getting that button to work!)