Execute following line and enter a password:

htpasswd -c /etc/squid/passwd proxy

Add following lines at the top of /etc/squid/squid.conf

auth_param basic program /usr/lib/squid/ncsa_auth /etc/squid/passwd
auth_param basic children 4
auth_param basic realm Please enter credentials!
auth_param basic credentialsttl 60 minutes
auth_param basic casesensitive off

acl ncsa_users proxy_auth REQUIRED
http_access allow ncsa_users

Restart squid:

service squid restart

Sources:

https://dokuwiki.nausch.org/doku.php/centos:squid:auth

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