Using localhost in a live server

Question

I'm working on a live site that db host is set to localhost. How is that possible?

define('DB_HOST','localhost');
define('DB_USER','user');
define('DB_PASS','password');
define('DB_TABL','system');
define('DB_PREFIX','pre_');

$conn = new PDO(
    'mysql:host='.DB_HOST.';dbname='.DB_TABL,
    DB_USER, 
    DB_PASS,
    array(PDO::MYSQL_ATTR_INIT_COMMAND => "SET NAMES utf8") 
);