That woman dropped last letter off (3)
I believe the answer is:
she
'that woman' is the definition.
(she refers to a woman)
'dropped last letter off' is the wordplay.
I cannot really understand how this works, but
'letter' could be 'he' (he is a kind of letter of the alphabet) and 'he' is found within the answer.
A single letter 's' remains which might be clued in a way I don't understand.
This may be the basis of the clue (or it may be nonsense).
Can you help me to learn more?
(Other definitions for she that I've seen before include "Female pronoun" , "Female person" , "- - Loves You (Beatles)" , "fiction" , "1887 Rider Haggard novel" .)