To shrink a jersey, wash it in hot water, and dry it on the hottest setting. The heat from the wash and dry cycles causes the fibers to shrink so that the jersey has a tighter fit.
For the best results, wash and dry the jersey without any additional clothing. Rick Davidson of Made Men suggests doing this several times until the jersey is the desired size. Keep in mind that a jersey made with cotton is easier to shrink than a jersey made with polyester or a blend of materials. Synthetic fabrics do not shrink at all, and jerseys that are already pre-shrunk do not usually shrink further.
Jessica Clark, a professional seamstress, also cites sudden temperature changes as a way to shrink jerseys without being too harsh on the fabric. In instances of a screen printing, where the emblem can peel off the fabric at high temperatures, she has a specific method designed to help prevent wear on the jersey. Wash the jersey on cold, and dry it on medium heat. Then, wash it again on cold, and dry it on high heat, leaving the jersey in the dryer for much longer after it is completely dry. This is a little gentler on sensitive fabrics and decals that can potentially come off.