Let's say your offset is 2.5VDC. For your signal of 0.6Vpp, your expected measurement range is 2.5V +/- 0.3V. Give a little margin and you could use 3V (2.5V + 0.3V + Margin) as the positive reference. For your 2 bit resolution, a 3V reference will give you a resolution of 0.75V per bit when using ground as the -VRef (which your schematic shows). Now, to get better resolution, you can set the -VRef to 2V (2.5V - 0.3V - Margin). What this does is reduces the voltage range that your comparators will use to determine the measured voltage from 3V to 1V. Now your resolution is 0.25V.
You chose your references based on the signal you are trying to measure. In your case, the 0.6Vpp sine wave. You also know that the AC sine wave is riding on a DC offset so the effective voltage that you need to measure is OffsetV +/- 0.3V. You don't need to measure anything outside of that range so limit your measurement system to the range of voltage you are interested in. Thinks of it this way, when you measure a 50 Ohm resistor, which range would give you the most precise measurement? The 100 Ohm range or the 100KOhm range?