Can you have local reverse proxies?

Perhaps this is a weird question I have, but I've been watching some technotim videos lately and he seems to have local dns addresses for local services. Perhaps I've got this wrong, but if not: how would you go over doing this?

I have a pterodactyl dashboard, which I access locally using the machines IP and the port, but it would be great to have a pterodactyl.example.com domain, which isn't accessible from other networks, but does work on my own network. I also still want some services exposed to the internet, so I'm not sure if this would work.