Simply place the INSTANTIATOR folder (the folder that this .txt file is in) inside the GameData folder of your KSP install.

Ergo, the filepath for this readme becomes: [KSP Directory]/GameData/INSTANTIATOR/Readme.txt

After that, INSTANTIATOR should pick up any config file designed for it. :)

License:
INSTANTIATOR was originally created by user Artyomka15 on the Kerbal Space Program forums.
This version is an unofficial release of a rewritten version by The White Guardian, designed to work with 1.3.X