The letter he represents divinity, distinction, specificity.
Attached to words, he may have three possible meanings:
A preposition meaning the definite article "the", or the relative pronouns "that", or "who" (as in "a boy who reads"). For example, yeled, a boy; hayeled, the boy.
A prefix indicating that the sentence is a question. (For example, yadata, you knew; hayadata?, did you knew?)
A suffix after place names indicating movement towards the given noun. (For example, Yerushalayim, Jerusalem; Yerushalaymah, towards Jerusalem).
He, representing five in gematria, is often found on amulets, symbolizing the five fingers of a hand, a very common talismanic symbol.
He is often used to represent the name of God, as he stands for HaShem, The Name, and is a way of saying God without actually saying the Name of God.
The prophet Isaiah said "ki beYa H' tzur olamim", with Yah, the Name is the rock of the universe. (Isaiah 26:4).
The wise interpret the word tzur, rock, ad deriving from yetzer, to form. In accordance with this, the Talmud explains that God used the letters yod and he, the ones which form the divine Name, to create the universe. With the letter yod He created the world to come, and with the letter he He created this world. (source: Menachot 29b)
Below you can see the movie of the production process of a big clay prototype of a hebrew letter.