Glossary: Internal / external diegetic sound
Sound that comes from the mind of a character within the story that we assume other characters in the scene cannot hear (internal diegetic sound); sound that comes from a physical source within the story that we assume other characters in the scene can hear (external diegetic sound).
From GoodFellas
Frame 1: Henry's voiceover: "See, Jimmy was one of the most feared guys in the city...." (internal diegetic sound)