First up, all players will gain a damage reduction factors when attacked by creatures that are lower level, starting at Cataclysm content and heading down from there. Creatures from Mists of Pandaria and, presumably Warlords of Draenor will not be affected by this. So once a creature from Cataclysm content or below (Wrath, BC and Vanilla) attacks a character that outlevels them, there will be a formula that determines how little damage the character takes. Celestalon presented it as such.
What this means is that, when your level 100 character goes inside a level 80 Wrath raid, they'll have a very large reduction in how much damage they take.
LevelDiff = PlayerLevel - CreatureLevel
if (CreatureExpansion < Pandaria) then
// 10% DR per level diff, with a floor of 10%
DamageTakenFactor = max(1.0 - 0.1 * LevelDiff, 0.1)
DamageTakenFactor = 1.0