The old T- shirt is used to make crochet rug in round. The shape of the shirt was already round so it can be used as an advantage by cutting continuous strips from the bottom to the armpit. Basically what you need to do is to remove the hem before cutting because it will be hard to curl it.
The yarn for the rug is to be created by stretching the strip and allow the knit in the T-shirt to curl on it. The big strips will help in creating yarn basically.
The first of all you will get the required fabric from shirts and which I have briefly explained above. The shirts are good if they are 100 percent cotton and are in simple prints or having no prints at all.
The next step will be the creation of your yarn. To a greater extend I have already simply explained the yarn creation in above mention steps. The shirt has to be cut till the armpit and then it has to be folded from one side to the other leaving one inch short. Now shirt has to be cut in equal size strips. The thicknesses and thinness of the yarn depends on the thickness and thinness of the strips and then you will be cutting while starting from the hem, on a slant, from 1 strip to the next one. The yarn has to ball up and start twisting to get it saves from tension. In order to have dense weave you will be crocheting in the round and than stitch it all to get the rug.