Wherever you want to attach a file from Google Drive, use the button with the page+ icon in the upper left to open the File Picker:
When the File Picker window opens, click on "Google Drive" from the selections on the left and then click the button to "Login to your account"
A separate pop-up window will appear. If you are logged into more than one Google account, it may ask you which Google Drive account you would like to access. Once you have successfully connected to Google Drive, the File Picker will show the complete file directory from your Google Drive account.
Navigate to the file that you would like to use, click on it and then click "Select this File" on the details that appear. A copy of the file now appears in the file submissions box. Click "Save changes" to complete the submission.
Please note: When you upload a file from Google Drive to Moodle, you are actually uploading a copy of that file. Any changes you make to the file after you submit it to Moodle will not carry over to Moodle. You must edit your submission and upload a new copy of the file if you make edits to your Google Drive file after submission.