you can say it again

does it mean 'coudn't agree more'?

is it a popular phrase?

Is it formal or informal?

Right, almost exactly. This phrase has basically the same meaning as: "That's an understatement."

JIM: Hey Bob.
BOB: Hey Jim. How have you been?
JIM: I'm doing well. I just got out of prison.
BOB: Prison!? That's no fun.
JIM: You can say THAT again!

(Stress must be on "that" because without it, it would sound like a very odd instruction. Hehe.)

yes, use the word "that," not "it". It is informal.

Don't be confused if some people actually say it again; they're just being silly :P

I just wanted to repeat kidkboom's point that in speech, this phrase must have very strong stress on the word "that".

An equivalent statement is "TELL me about it!" (again, with extremely heavy stress on "tell").

I suppose that in Russian you could say "ты слишком мягко сказал!", or something like that, to express the idea "You are understating the case!"?

hallo, thank you all for the explanations!

Throbert, 

 "ты слишком мягко сказал!" can be used technically, but in most cases people would say: Это ещё мягко сказано! (impersonal structure is common in such cases), (meaning literally, 'this sounds even mild/understated').

Another Russian equivalent which, i think, is most close to 'You can say that again' is "Не то слово!" (то is stressed here), literally 'This word is not enough to express the case'