Very young. A grasshopper is tiny, and to stand, metaphorically speaking, no higher than the insect's knee was to be very small or young or both. The expression was usually used by male relatives to point out either a child's youth (“Drive the tractor by yourself?— why, you're not even knee-high to a grasshopper”) or the speaker's experience (“I've driven tractors since I was knee high to a grasshopper”).