I'm not sure of the "rule" on this one, but what I went by was when my son could pull up to a sitting position, the mattress went down a notch. Or maybe more, depending on how tall your son is. Then once he could stand up and as he grew, I lowered it so that it always stayed low enough that the top would hit at his shoulders or higher. I just looked at the way my son pulled and reached, and I could tell when he was getting to that point that he could pull enough of his body over the top rail that he might topple or climb out. I hope that makes sense.
PS- I lowered mine in stages because I am really short, my crib was not a drop side, and my son didn't put himself to sleep for forever. So I tried to save my back as much as possible with having to lower him into it. I guess you could just drop it all the way down now. Also, I am a big fan of childproofing as much as you need to to keep your sanity. :)