Dissertation: How to properly reference earlier versions of working papers in the German academic system?
What I typically did in such a case was either a footnote at the title in the gist of


  A previous version of this paper appeared at XYZ Conference in 1201.


or a mention in the introduction with the citation


  This paper is based on our previous work [ABCD+ '01].


Two side notes:


If this is a paper and you submit double-blindly, you'd need to revise the statements accordingly. You might even want to remove them for review and/or inform the editor.
The information on previous versions and an explanation "what's new" belongs into the cover letter of a journal submission.