An internal link is just one that points to another page or resource on your own website. Why does it matter? Well, internal links are a factor in SEO. Search engines do take into account the internal structure of how your pages link together with each.
Now to be clear you don’t earn some form of rankings boost directly from internal site links the way you might from prominent inbound links from other sites. It would be too easy to game the system if that were the case. Like a lot of technical SEO factors, this is about having a good stable site foundation that works both for your users and search engines.
One of the keys to optimizing your site links is to use descriptive text that give an indicator to search robots on what the goal is for your source page to target.