An internal link is a hyperlink from one page to another on the same website. Google considers an internal link to be a ranking signal as to the relevancy of the destination page to the keyword appearing in the link's anchor text. This ranking signal is not a ranking signal that will change the destination page's rank in comparison with similar pages on other websites, but it acts as a signal to Google as to which page on the website is the authoritative resource for the keyword. An internal link with the rel=nofollow attribute will not be considered a ranking signal by Google, like with inbound links.
A guide to internal linking strategy