Smash mirror with hammer. I put it on a piece of thick fleece and kept the hammer down when I smashed which prevented most of the little bits from scattering much.
Place a small layer of Mod Podge Dimensional Magic into the bottom of the bottle cap and with tweezers add the pieces of mirror to the bottle cap.
Top with more Dimensional Magic so that the mirror pieces are submerged.
Allow to dry (preferably over night). It will be cloudy at first but it will dry crystal clear.
Glue on bail to the back and string on a chain.