There's a bit more meaning to the phrase. Native speakers usually say "It was so quiet, you could hear a pin drop." and it's often used when people in a room are fighting or arguing and the situation is really tense. The point of silence (or when you could hear a pin drop) is usually reached after both sides have been arguing for a while but neither side is giving in nor agreeing, and both sides have exhausted their argument (meaning, they have nothing more to say to each other). At this point, they're usually just staring at each other, and being very angry. It can be entertaining to watch, if you're not the one arguing.  

It's an idiom, but it's one that makes perfect sense, literally. The best way to understand it is to find a sewing pin and drop it on the floor. It does make a tiny sound. If it's very quiet, you can hear a pin drop. According to this chart,

http://www.noisehelp.com/noise-level-chart.html

the sound intensity of a pin dropping is 10 db. The sound of leaves rustling is 20 db. The sound of a whisper is 30 db. So, if the windows are open and leaves are rustling in the breeze, the noise made by the leaves will be so loud that you won't be able to hear the pin!