In the admin cp, plugin system, add new plugin. You then choose a title for this plugin (the name that you like, it's on your own) and choose mod_index_navigation as hook. Then you place the code in the "Plugin PHP Code" section.
Do not forget to activate the plugin by checking the radio button under this text area
Really, it's simple to do. Easier than .xml file, at least for such a small add-on. XML files are good for bigger projects or admin-only tools, I think.
I'm still currently working on the two last points, but the end of the year is hard for me and my work

I do not have much time for this.