You get the Time-stop on the level Bad Science 1. the first level of the 8th world you play. It's part of the story, and you can't miss it.
Once you get it, hold
to charge it, then let it go. When the screen turns blue, press
. You may want to turn on your achievement tracker. After 30 minutes, this will pop in the menu if you leave it there. (Make sure to move your controller a bit so it doesn't disconnect.)