[Sharon]

I'm not sure what causes this behaviour, but in my years as a pre-school teacher, I've encountered many children who share this habit. To me, it seems a lot like hair-chewing, nail-biting, and even, to a degree, thumb-sucking.... in other words, I think it's a self-comforting tactic, a coping mechanism, something that children revert to when they are anxious, stressed, tired, overwhelmed, overstimulated, understimulated, hungry.
One little boy I taught years ago was so bad about clothes-chewing that he'd chew the necklines out of his teeshirts faster than his poor mama could replace them. We finally hit on the idea of tying a bandanna around his neck, cowboy-style. We told him he could chew on the bandanna all he wanted, that's what it was there for. Oddly enough, he never chewed on the bandanna much... and stranger still, he stopped chewing his shirts as well.
Maybe he just outgrew the habit. I've noticed that when children chew on their clothing, it is most often at times when they are tired or sad or nervous about something.
You might try redirection... when you notice your son has clothing in his mouth, offer him food or an activity. Play a game with him, make up a job for him to do. If nothing works, you might consider counseling to rule out underlying disorders like OCD.
Try not to worry too much... trust me, I've been teaching for a decade, and clothes-chewing is NOT uncommon. Most kids seem to eventually outgrow it on their own.
Best of luck to you, ~ Sharon