Summarize this article:

If you want to, you can put the shirt on to determine the new length. Keep in mind that your shirt will be about ½ to 1 inch (1.27 to 2.54 centimeters) longer, depending on how wide the original hem is. Spread the shirt out on a flat, even surface, right-side-out. Use a ruler to measure up from the bottom edge of the shirt every so often. This will ensure that your shirt is the same length all the way around. If you can't find a dressmaker's chalk or pen, you can make the line using sewing pins instead; just be careful not to pin both sides of the shirt together. Keep folding your way all around the shirt. It should now be a little shorter than before. You are still folding on the outside of the shirt. Do not fold the hem on the inside. Use the zigzag stitch or the stretch stitch on your sewing machine. Make sure that your thread color closely matches your shirt. Keep your shirt right-side-out. You should now see the original hem, the hem's original stitching, and your new "seam" just above it. Focus on the new seam you made. This will flatten it, and make the bottom of your shirt smoother. If you'd like, you an secure the hem with sewing pins, although this is not necessary. Anywhere between ⅛ to 3/16-inch (3.2 to 4.3 millimeters) away will be plenty.Use a stretch stitch for this step, and be sure to go back and forth over the start and end of your sewing a few times to prevent unraveling.  Start sewing from one of the side seams. This will help hide the start and end of your sewing better. If you secured your hem with sewing pins, be sure to pull them out as you sew. Try to cut as close to your stitching as you can. Discard the excess material, or save it for another project. When you are done, go back over your shirt and snip off any excess or loose threads. Your shirt is now ready to wear.

Summary:
Figure out how short you want your shirt to be, and make a mark on the outside of the shirt. Use a dressmaker's chalk or pen to draw a line all around the shirt at an even distance from the bottom edge. Fold the hem up until the bottom edge touches the line that you drew. Sew around shirt, as close to the selvage edge as you can. Fold hem back down, and tuck the excess fabric inside the shirt, away from the bottom of the hem. Press the hem with an iron. Top stitch as close to your seam as possible. Turn the shirt inside-out and cut the excess material away. Turn shirt right-side-out.