The cloze plugin add-on for TinyMCE is available at https://moodle.org/plugins/view.php?plugin=tinymce_clozeeditor for Moodle branches 1.9 and 2.x.
It even works in Moodle 2.7 provided that you choose TinyMCE as your default (profile) personal (or site default) text editor.
Documentation for this plugin is available in Moodle Docs page http://docs.moodle.org/27/en/Cloze_editor_module . There is also a Docs page translation in Spanish language.
I think this add-on makes writing Cloze question types very easy, fast and rather syntax-error-free for most/many/some teachers
Unfortunately, the main developer no longer has the resources to adapt it to the new Atto editor . Any volunteers?
Some people have suggested that this add-on might be a good idea for inclusion in future core branches. After all, writing good questions is a basic need in Moodle and question types add-ons are a very well developed moodle expansion.