The size of the rectangle is the width of the gap in the lacing plus about 2", by the height that will look right, this varies corset to corset depending on the style, so its a matter of personal choice. Cut this out on the fold of your corset fabric, plus seam allowances.
Pin the long side of your rectangle to on side of the corset. I have slide mine under the bias binding because there is a gap, but if this is not the case it doesn't matter.
Stitch down with small neat stitches. If the modesty panel is probably going to be removed the just tack it..
Finished, now it is ready to lace and wear.