Pinch out some fabric with your fingers - under the armpit - two layers of fabric, the sleeve and the body - from the outside of fabric
Sew it with a curved seam, and then cut off the excess fabric - maybe 1 inch wide at bottom, curving up to zero on both front and back. 1/4 inch from seam.
Then turn fabric inside out and sew another row of stitches, capturing the raw edge inside so it won't unravel
Look up French Seam on thru-hiker.com articles