Cindy,
The loops that I have seen were usually knitted. Back in the day, I purchased cotton loops from Woolworth's and made very thick, sturdy potholders that I am still using today. I still have that plastic potholder loom, too! I have seen woven ones using a cotton yarn (such as sugar & cream) that may be easier to create. If you have a Michael's Craft Store nearby, you might see if they have the cotton loops.
If you are intent on making the "loops" yourself, then I would suggest making a large circular knitting knobby (aka spool knitting) in which nails are pounded into a wooden doughnut and the results come out inside the doughnut. There are instructions on how to "knit" in this fashion on the internet. Each one is a little different. One should work for you.
Good luck
