I've added a custom dimension and I'm wondering how I can control the terrain generation of the dimension. As it is right now the generation is complete chaos with giant mountains and floating islands, and I'm wonder what I need to change to make the generation more like the overworld.

Any help is very appreciated.

If you want to customise the dimension somewhat I would recommend this site as it has a built-in viewer so you can see your changes. https://misode.github.io/worldgen/noise-settings/?version=1.20.3

Otherwise if you just want it to be a replica of the overworld you will need to change the noise_settings in your "dimension/example.json" file to the overworld. It should look something like this:

"generator": {
  "type": "minecraft:noise",
  "settings": "minecraft:overworld",
  "biome_source": {
    "type": "minecraft:multi_noise",
    "biomes": []
  }
}

Hope this helps!