How and when does the kelvin measurament actually works?
simulate this circuit &ndash; Schematic created using CircuitLab

Consider the two circuits above, we want to measure R1 and R2.

Assume Rw1 to Rw8 represent the wiring resistances.

We know \$ R = \dfrac{V}{I}\$ and all wires have resistance. Assume volt meters are perfect (taking no current) and that the current supplies have internal current meters.

The circuit on the left represents a two wire measurement the current flowing out of R1 causes voltage drops across all three components due to the resistance of the wire.  I1 sees the largest voltage, then VM1 then R1.  This measurement of R1 is an overestimate because of these drops.

In the circuit on the right we have a 4 wire 'kelvin' connection current flows out of I2 and through R2 so there is slightly more volts across I2 than R2 but we don't care.  VM2 is accurately measuring the voltage across R2 because there is no current flowing in that loop so we measure R2 correctly.



In principle these wires could be any length with two obvious limitations


Very long wires from the current source may prevent it from the current required.  The current source usually has a low maximum voltage.
The wires to the voltmeter have a high impedance load at one end so may pick up additional signals in an electrically noisy environment.  This may be mitigated by using a twisted pair.


I have never seen a problem with cables of the sort of length you typically find in a test lab however.