What does this phrase mean?

Well, first of all, the phrase is grammatically incorrect as stated, it should be, "I can't agree with it more."

It simply means that the speaker is in absolute accord with whatever "it" is, and agrees with "it" as much as humanly possible, and, therefore, is unable to express any more agreement than he or she already has.

Good luck!... ☺

you are 100% in agreement with it, no room to not agree, unable to doubt liking it, its perfect and amazing

" I CAN NOT AGREE MORE WITH IT " =

WHATEVER THE "IT" STANDS FOR ; THE PERSON WILL NOT COMMENT , DISPUTE OR
ADD ANYTHING MORE TO THE CONVERSATION THAT HAS ALREADY BEEN DISCUSSED.
THEY ARE SATISFIED WITH THE CONCLUSION AT THAT POINT.

Absolute, unshakable agreement.

"I" = the nominative singular pronoun, used by a speaker in referring to himself or herself.
"Can't" = contraction of cannot.
"Agree" = to have the same views, emotions, etc.; harmonize in opinion or feeling.
"More" = in greater quantity, amount, measure, degree, or number.
"With" = in support of; on the side of.
"It" = used to represent an inanimate thing understood, previously mentioned, about to be mentioned, or present in the immediate context.

Therefore:

"I can't agree more with it" = the nominative singular pronoun cannot have the same views in greater quantity in support of an inanimate thing understood, previously mentioned, about to be mentioned, or present in the immediate context.

Hope this helped.