Simplistically, the engine thrust depends on the density, while the rudder power used to counter the thrust asymmetry depends on dynamic pressure.
So, As I go up in altitude, my density reduces and thrust decreases. At a fixed true airspeed, the rudder power decreases, but at a fixed indicated airspeed the rudder power is practically constant. Since VMC is quoted in IAS, you therefore get less thrust asymmetry but the same rudder power at the same IAS, which means you can then go to a lower speed at altitude and still maintain control.
Left out a lot of the finer details, but that's the one paragraph version.