(Firstly, couldn't a more meaningful word like "rest" or "heal" have been used? At the start of the game I kept on having to remind the other players that "rally" meant "rest" or "healing". I'm aware of the word, but I'd only use it myself with the meaning of "a protest march".)
Anyway ... the very brief rules about this important action say that you can use it
Whenever a hero successfully kills a monster, disarms a trap, or assists another hero...
We had a debate about this last situation. Does a hero only get to rest when he assists another hero and they successfully kill a monster?
Or can an assisting hero rest every time he assists, even if the monster didn't die? So a creep could hang out next to a nasty monster and get multiple heals while a true hero is killing it off for a measly one heal?
Some folks argued that the first was more fair and thematic, others that the second was the "reward" for assisting another player.