Fighting Larger Creatures

[ParadoxGamesHLM]

Ages ago I came across a section of rules explaining that when larger creatures fight smaller creatures, the smaller creatures size is lower relative to the larger creature. In practice that meant that smaller creatures got more AC than they would as standard. The question is, is that rule actually a thing? And if so, what rulebook is it in?

[Kaleph]

I'm not sure if I'm reading your question correctly, but it seems, in the first place, that you are referring to the standard size modifiers to AC and to-hit.

So, a small creature gets a +1 AC due to its size in comparison with a medium-sized creature, while a large moster suffers a -1 to-hit. Which means that, when fighting a large Monster, a small creature has an actual +2 bonus to its defense due to the size difference. This modifiers are described in the PHB.

Is this was you've meant?

[Thurbane]

There is no such rule that I am aware of...it sounds like it might be a fluff description of the size modifiers to AC that all (non-medium) creatures get?

[DEMON]

As Kaleph and Thrubane mentioned, it's most likely just fluff a description of the size bonuses and penalties to AC that small and smaller and large and larger creatures, respectively, get.

Or it could also refer to Underfoot Combat and Titan Fighting feats, both of which add AC bonuses to smaller creatures fighting larger ones.

[Zombimode]

Ages ago I came across a section of rules explaining that when larger creatures fight smaller creatures, the smaller creatures size is lower relative to the larger creature. In practice that meant that smaller creatures got more AC than they would as standard. The question is, is that rule actually a thing? And if so, what rulebook is it in?

It is just a rephrasing of how size modifiers work. Instead of applying a the difference of size categories as a situational modifier on attack rolls (which is what you describe), creatures in D&D get the difference of their size to medium as a static modifier into their stat block.

But mathematically there is no difference: A small creature gets a +1 size modifier on attacks and AC. Since modifiers to attack rolls are isomorph to modifiers to AC, two small creatures fighting euch other are indentical to two medium creature (assuming everthing else is equal).