First, you must unlock the campaign stage "One Final Cameo". Immediately after the mission starts, run to the far left of the screen, hold the "block" button, and keep facing to the right. As long as you are never on the same plane as the dragon and keep blocking, you won't be hit by any of the attacks, even the multi-plane attacks. Keep doing this until the timer runs out to earn a massive amount of EXP.
Once you have completed the mission in Campaign mode, you can access the mission in Free Play mode, meaning you can use this technique to level up any characters that you have unlocked. If you use this technique with a Level 1 character, you will immediately jump to level 16.