What should be the Preferred DNS Server for a new DNS Server or for a new forest?

As the Preferred DNS Server, I found three options; either 127.0.0.1 (loopback address) or 8.8.8.8 or IP address assigned to the server.

What should I use for the Preferred DNS Server IP for a new DNS Server or for a new forest? And

Why Loopback address is used as the Preferred DNS Server?

Please resolve my above queries.

Regards

GNS