Does an IPOD have a standard 3.5mm headphones jack? ( I Own a creative which does),
In that case its a simple matter of connecting it to aux in.
If you want DIY you need access to solder.
Buy 2 headphones jack (2.5mm or 3.5mm depending on the aux and ipod sizes)

The cost should be about 15rs.
Buy a cable, with three wires, or just use the cable you have with some old headphones.
Solder the ends N-N, G-G, L-L
There you have your mp3 player to Aux in connection.
If your AUX in is not of the stereo type but you have a dual aux in with different sockets for L and R channel you need something like this
You can buy a readymade cable for something like 100rs or so.