He considers himself above average as an example of his sex, i.e. in "manly" qualities: strength, masculine physique, courage, etc. But he's mostly talking about attractiveness (which is a composite of these and other factors). He probably also thinks that Diana is just asking about his penis, but she's asking about him in general. (If you watch her eyes, it's clear that she's only looking at his face, and then at his watch, which is much more interesting.)
Think about the subtext of this conversation: It's obvious (here and in earlier scenes) that Diana finds Steve attractive. But he's the first and so far only man she's ever seen, so she wants to know whether all men are like this, or if he's special. She knows that the chances that the one man who crashed near her secret island just happens to be exceptionally good-looking are slim--that's what "exceptional" means. (We know that the chances are 100%, because that's how casting works.) Steve wants her to know that he's definitely special.
At least, he thinks he's special, but given that he's an Air Force Officer, he's probably right that he's stronger and has a "better" physique than the average man. He also proves himself, over the rest of the movie, to be courageous, intelligent, and savvy.
