The quote you're referring to is spoken by Satan in book 1 of Milton's Paradise Lost. Specifically, in lines 254–255, he states:

The mind in its own place, and in itself
Can make a Heav'n of Hell, a Hell of Heav'n.

Satan, and the legions that rebelled against God with him, are in this moment adjusting to Hell and their new state of being. It is in this moment that Satan shows the closest thing to remorse that he would ever display. It seems that he, as well as the angels that followed him, are reeling from the repulsive reality of Hell in comparison to the "celestial light" from whence they came.

From this perspective, this line seems to be nothing more than a rationalization used by Satan to convince himself that Hell is preferable. He is telling himself that, no matter how objectively more preferable Heaven may seem, all of pleasure is simply a matter of perspective.

However, it also a testament to his ambition and resolve. Satan believes that he can make a heaven out of hell because supreme power is his dearest ambition, and this is impossible in the presence of God. He believes that his mind that what makes him fundamentally himself is unchanged, even though his circumstances and environment have deteriorated. He knows, as he would later proclaim, that he would rather rule in the worst of circumstances than serve in heaven.