I have an Build agent on a server with two builds definitions. Unfortunately if I queue the two builds, each one will create a folder and get the repository from TFS. What settings should I make in order to configure the two builds to use the same local repository?
You don't. Each build definition has a unique clone of the repository for, at a minimum, one very good reason (although there are others): Builds can run in parallel. What if you had two build definitions pointing to the same repository folder running at the same time? That's right, you'd hit all sorts of problems with locked file access/concurrency.