You might have to experiment a bit, but you want the Tee placed so the water doesn't have to fall far into the overflow compartment from the tank. Mine is a 1 1/4" durso, and the bottom of the horizontal part of the tee is about 2 1/2" below the tank water level. That keeps the water level in my overflow about 1" below the display. Yours could differ depending on the plumbing and pump size, but that should give you a starting point.
The vent cap on top of the tee just has to be above the water level. Mine is sitting directly on top of the Tee.