The cable has no adjustment. If the reason the you think the cable is too long is that the traction control still does not work correctly then you may want to look at the drive belt. The cable may be a little longer if this is an aftermarket part and not an original Toro part. Go to the link below and you can see the parts breakdown. The homeowner parts section is at the bottom left of the page.
There is not special way to hook it up. The end of the spring just connects to the arm. When you pull on the handle it moves the transmission ( rotates) and tightens the belt. If the belt is worn too much you will not be able to get enough tension on the belt.
The guard should be on it as it is a guide of sort. I doubt that the belt will come up and cause any damage if you tried it with the guard off, but if the belt is worn enough it could. The engine does not need to be running to have tension on the belt. You could take a set of vise grips and clamp the handle down and then fell the tension on the belt. Do not start the engine with the handle clamped down.
Look at the attached picture to make sure you have it hook up in the correct holes. Is the cable a genuine Toro part or is it aftermarket?
The label reads.. TORO .. 770 ...(NNN) NNN-NNNN Cable Traction
A Bar Code in the middle of the lable then..
1-6 122PS126 1 31 9 8 38 ... at the bottom of the lable
That's all the information