A current sense resistor will be mostly place in the source line of the transistor. It should be low resistance to reduce the voltage drop and power dissipation, but must be large enough to get a detectable voltage for the overcurrent detector.
A simple short circuit protection can be formed by a current limiter, e.g. a single BJT transistor shorting the gate control signal, using Vbe voltage of 0.6V as threshold. But operating the transistor as current source involves high power dissipation, thus a current limiter must be complemented by a delayed shutdown circuit to protect the transistor.
In software controlled systems, a low part count solution can be a combination of a hardware current limiter, signalling the overcurrent state to the processor, and a software shutdown.