The Sheltering Grass is within the Great Valley, across from the Sinking Sand. Its name suggests that it is a place where young or small dinosaurs can hide if danger enters the Great Valley. They would presumably be protected from Sharpteeth because of the Sinking Sand surrounding the area.
The Sheltering Grass also borders the Meadow of Jumping Waters. Sheltering Grass might also be a term for long grass that one can hide in and hence may be a more generic term (like Smoking Mountain).