Let me see if I can draw it.
The first part that you understand is this. Obviously it's a cycle.
0-1-2
| |
5-4-3
If this is not the case, the path must be coming back to itself at some point:
0--1-x-7--8
| / \ |
| 5-4-3 9
| |
12--11---10
where x is both i=2 and j=6. So we can skip over the loop by going from i=2 (x) to j+1=7. Because we are skipping over the loop, this outer cycle is obviously shorter than T.
I think it should be clear that repeating this procedure will skip over all loops.