Open the .ogg file in Audacity.
Look for and click on the spot where you want the loop to start from, and check the number under 'Selection Start' on the bottom.
Change the value to 'samples'.
Write the number after 'select.bgm.loopstart = ' in the .def file.
Look for and click on the spot where you want the loop to end.
Write that 'samples' number after 'select.bgm.loopend = ' in the .def file.
Open the stage in Mugen to make sure that the loop is in the right place. If not, check for the right spot in Audacity again.
Magical Klara's post in How do I use loopstart and loopend with player select music was marked as the answer