The rule of thumb I've always used is to "put a smile on them". Always double check that the bit is resting in the center of his bars as well. If he has been handled roughly for a long time and you suspect "bit abuse" then a little tighter or looser should put the bit in a new place - just be sure it is not hitting teeth.
I go barely a wrinkle My horse has a very soft mouth. I figure if you start with the bit in there too tight to begin with, he doesn't have a chance to respond to a lighter aid. Doesn't seem fair to the horse.
Wrinkles do not matter. Every horse's mouth shape and conformation is different.
You need to LOOK inside the horse's mouth when the bit is in. The bit should lay right in the middle of the toothless area in their jaw. If it's too loose or too snug, it can bang on the teeth when you ride.