Before you shrink a shirt, understand that the process cannot be reversed and you cannot control the exact size of the end result. Washing and drying certain shirts at high temperatures causes the material to tighten and shrink. This can be done by accident or with intention of creating a shirt a size down from the size you bought. Pre-shrunk shirts will not shrink further using the following process.
Wash your shirt. Use the highest temperature setting on your washing machine. Use industrial-style washing machines at a laundromat for the best effect.
Dry your shirt. Dry it using the highest temperature setting possible. The hotter the air in the dryer, the more your shirt will shrink.
Iron the shirt. Use the highest temperature setting possible that won't ruin the material of your shirt.
Repeat the process to continue shrinking your shirt. Repeat as many times as possible but know there will be diminishing returns each time.