A phrase that can easily work it’s way into any conversation. The “she” is purely hypothetical, and it is usually said after somebody says something that the hypothetical “she” would say during sex. There is a variant of this phrase: “That’s what he said,” and it is the same, but for something that the male would say during sex.
That’s what she said:
Guy1: Where do I put this worksheet?
Guy2: In this hole.
Guy1: That’s what she said.
That’s what he said:
Guy1: WTF is on my hot dog?!
Guy2: That’s what he said.