In this phrase, ‘rusty’ means a skill is not as good as it used to be. In other words, the skill was good before but the level has dropped.
It is usually because the skill hasn’t been used or practiced for some time. It is often used to talk about skills like speaking a language or playing a sport/instrument.
Here are some examples:
I haven’t played the piano for ages, I’m a little rusty.
My golf is a bit rusty, I haven’t played for years.
My tennis is very rusty these days.
The word ‘rusty’ comes from something being covered with rust. Rust is the orange-brown stuff that forms on metal things that are old or not used for a long time (eg. your unused bicycle).
When you want to improve a skill that is rusty, you can say you want to ‘brush up’. For example, I must brush up on my French before I go to Paris.
Finally, be careful with the pronunciation of the ‘ru’ in ‘rusty’. It’s pronounced /rʌ/ not /ruː/. The ‘u’ sound here is the same as the ‘u’ in umbrella.