Step 1: Magnetic Moment Formula
$M = n I A = (1) \cdot I \cdot (\pi r^2)$ for a single turn.
Step 2: Relation with Length
Length of wire $L = 2\pi r \Rightarrow r = \frac{L}{2\pi}$.
Step 3: Substitution
$M = I \cdot \pi \cdot (\frac{L}{2\pi})^2$
$M = I \cdot \pi \cdot \frac{L^2}{4\pi^2} = \frac{I L^2}{4\pi}$
Step 4: Proportionality
Since $I$ is constant, $M \propto L^2$.
Final Answer:(C)