Phrase used to tell someone to stop being overly sensitive. As in having a "hooded clitoris", which reduces the stimulation and overall sensitivity of the clitoris. By "putting a hood on it", an individual would thereby have reduced sensitivity and stop being so emotional about various situations.
Girl 1: Last night my boyfriend and I watched "It's a Wonderful Life", and he kept crying throughout the movie.
Girl 2: Damn, your man needs to put a hood on it and stop being such a little bitch.