I hear people mention this concept but I don't seem to understand the idea of using terrain, in game. Can someone enlighten me with some terrain tactics?

My guess would be using line of sight to your advantage and per example position units that are weak when charged by cavalry near rocks so they're harder to reach for cavalry.

Anti-cavalry is one of the clearest examples; positioning in or next to difficult terrain stops them dead in their tracks. More generally, larger pieces of difficult or impassable terrain are a great way to prevent outflanking by numerically superior forces - but vice versa, be wary of terrain preventing your own horde from being able to bring full numbers to bear on the enemy. Things like (ruined) buildings or bridges can be extremes of such chokepoints, where very few models can block an entire area. Then of course there are raised areas to position archers on, or hide others behind (fast troops, especially flying ones, can often jump from one bit of cover to the next). Finally, certain pieces of terrain can be especially beneficial to some armies - unsurprisingly, wood elves like woods (partial cover for Elven cloaks to work, full movement); they even allow them to move half and shoot bows at the same speed any enemy troops advancing on them have. Cavalry with the woodland creature special rule of course means the aformentioned anti-cav tactics may not always work, and you may be able to catch an opponent off-guard with it (albeit likely only once!).

I see.

How can positioning my troops near a rock stop cavalry? That doesn't make sense, or are you referring to the fact that less horses can surround your models?

If there's gaps between rock's smaller than a cav base then they must go round or try jumping it.