At first I didn't notice, but watching the movie several times I finally got it. The winds of her mother and Granny Willow's songs "Que Que Natura" made her understand John Smith's English.

The only way Pocahontas was able to understand John Smith was by Grandmother Willows words.If Grandmother Willow words didn't help her,she probbley still wouldn't understand what John was telling her.

well she did speak english to her people,her father,her best friend and her animals so yeah but with grandmother willows help she could also communicate with other nationaltys as well:)

@pinkmare: I thought she was actually saying Native American language to her people, but Disney made it English so we could understand (and easier to find voice actors too!).

Well, that happens to lots of movies.
They actually speak their native language (for example native american language) but the actors and actresses speak english but they're supposed to speak their native language.