The only useful distinction I can make is that connection refers to the linkage between two things (nodes) while interconnection refers to multiple connections among multiple nodes. This is not borne out by examining dictionary definitions, however, and if dictionaries (i.e. current usage) have it right the two are pretty much interchangeable.
If you look at the word roots, interconnection seems pleonastic: con (together) + nectere (bind) already means bind together in connect. Adding inter (between, among) to "bind together" only adds "between" or "among" to the meaning. One wonders how things can be bound together without being "bound together between" — but that is language for you.
Etymonline tells us that interconnect is by far the more recent coinage, first attested in 1865, some three centuries after connect. So I really don't have any good advice other than to mention how I think of the difference, as I did in the first paragraph of this answer.