That’s not really correct.
That depends on the type of compressor. Certain models of compressor have specific frequency-dependent characteristics. But that’s not how compressors work in general.
There are many compressors which are not specifically frequency dependent, and work across the whole audible frequency range.
A compressor can be thought of a bit like an automatic gain control. If the signal gets to loud, the compressor turns it down a bit. If it gets too quiet, it turns it up.
So, when you pluck a note, normally it starts loud and tails off, going quiet fairly quickly. A compressor will keep turning the volume up to keep the note sounding loud.
That is, until it reaches a point where it cannot sensibly turn it up any longer and, at that point the note is allowed to die out. (This level is called the “threshold” on most compressors).
A (often desirable) side-effect of this is that notes sustain longer.
That is the basics of how compressors work and, if you think about it, if the notes stay loud for longer, that makes the average level louder. It is the peak levels that cause the amp to go into overdrive. So, by making notes on average louder without making the peaks louder, you can get more volume without pushing the amp into overdrive.
The full description of this is “dynamic range compression” because you are reducing (or “compressing”) the difference between loud and quiet sounds (which is known as “dynamic range” or just “dynamics”). You are making all the notes much more even in volume.
The downside of this is that it reduces dynamics. What do I mean by this? I mean that if you want to pick some notes quiet and some notes loud, too much compression will stop you doing this.
So some people like to use picking dynamics (picking harder or softer) to control whether the amp goes into overdrive or not:
This is a powerful technique when done right, but it requires a degree of picking control, and it also requires the amp (and any pedals in front of it) to be set up just right. The classic setup here is the “edge of breakup” tone.
Depending on your setup, it can limit how “dirty” you can get.
There are cases where picking dynamics works best, and others where turning down the guitar volume control works best. The compressor is just a tool which helps in the latter case.
Cheers,
Keith