I did this using small islands, so it may be different in large islands.
To get to the worm boss, you have to progress to 1-04. There is a character next to the point you teleport in at who will give you a quest to obtain an artifact that you can trade for a totem. Follow this, get the artifact and put it on (it is a hat). Now talk to the next character in the temple bit and trade for the worn totem piece.
Now you can build the portal in this area to travel to 1-05. Note there are 2 portals here and the other goes to 1-08. If you end up at the wrong level, teleport back to 1-04 and use the other portal.
On 1-05, look for high up point that is a big face in black stone. There is a hole here that you can equip the Worn Totem Piece and place it in. This will open a portal that takes you to the Worm Boss.
Whilst fighting this boss, be aware of the trophy for defeating him without killing any small worms:
To defeat the boss, take out the worm tail that spawns, this will down the boss so you can attack it, and when it sits up again, repeat the process whilst dodging the acid he spits.