This shrine you're likely to discover only in your travels. No one mentions the site on the southeast bank of the Silverfish River east of the Imperial Bridge Inn---indeed, no one talks about the god Peryite at all---and its not close to any of Cyrodiil's cities.
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Step 1: How to Level Your Combat Skills Faster in Oblivion: the Elder Scrolls IV
Strange place. The five worshippers, arranged in a circle west of the shrine, are all frozen in place. Try to activate one to learn he or she is unconscious. The followers tried to summon the god with a spell. It evidently backfired or a resentful god fired back, and now the bodies of the five rest in the mortal plane while their souls reside in oblivion. To use this method do not activate the shrine! Since these npc's are considered necessary to fulfill this deadric quest they cannot die, luckily the game does count them as target.
Step 2: Peryites Shrine
So this means if you attack your skill will go up. Before you stab, crush, punch or crisp them, it might be useful to maximize your difficulty. Even though they can't die these guys will fall once their health becomes to low, just to get up annoyingly slow and reset their lifepoints.
Step 3: How to Level Your Combat Skills Faster in Oblivion: the Elder Scrolls IV
You can choose out of 5 combat skills to train: blade, blunt, hand to hand, marksman, destruction (if you choose to train blade or blunt, I recommend you arm your character with a light weapon that swings faster so your skills will level equally fast. Also if you shoot arrows at them, keep in mind that you cannot loot these guys so a whole load of shitty arrows (iron) is your best option.
Since this method isn't a cheat (but an in-game bug) you can repeat this endlessly without fear of harming the games performance (also means this applies to xbox360 and p.c.).