When you get to the end of the T-shirt, you'll have something that looks a little like the T-shirt yarn in the picture, with one loop left and a triangular or rectangular piece connecting the loop.
Simply snip that piece and the loop will straighten out, giving you one long piece of T-shirt yarn cut continuously from your shirt.
You can leave the end of the yarn slanted if you don't care about perfection (and this is not a project about perfection) or you can trim it square, whatever you prefer.
If at any point you make a wrong cut and end up with a couple of different pieces of yarn from the same shirt, don't worry. It's still totally usable even if it's in shorter lengths.