Altitude is primarily found by measuring (static) air pressure, which reduces the higher you go. You set the current air pressure on the ground, (from the airfield weather report) on your altimeter, which will then display zero altitude on the ground and altitude above the airfield in feet after you have taken off. Temperature can affect altimeter readings to a lessor extent, and the siting of the static port(s) on the aircraft is carefully chosen to avoid local distortions as much as possible.
But there is an awful lot more to it than that - including different definitions and reference points for altitude - and rather than risk confusing you, I strongly advise buying the Trevor Thom series of Air Pilot's Manuals for PPL training. Or perhaps just Volume 4, which explains the aircraft technical systems, including instrumentation and their faults and compromises.
I am sure other text books are available.