You would probably say 'It's made of cotton', because a cotton garment, for example, is usually made entirely of this fabric. When you look at a cotton shirt, it is obvious that this is what it consists of. This is different from saying, for example, that plastics are made from oil, that bread is made from flour or that cheese is made from milk. In these cases, the raw material has been processed and changed.

We say 'Made from' when we talk about something that has gone through a process, for example "Glass is made from sand." But, otherwise, when we can see the material and don't talk about the process, it's 'made of' so... "A chair is made of wood" for example. So, in this case, we can say "A shirt is made of cotton" Hope that help! :)