This is unlocked when you chain 10 puyo matches.
As this is a longer chain, I highly recommend doing this in the wide-play-area puyo option in Dream Arcade.
To get there, go to the yellow option on the main menu, then click the bottom right option on the second menu. On the third menu, pick the top right option. Then choose your character. On the next screen, you'll see your character, and three options at the bottom of the screen, with the middle one selected. Select the right option, and press A. This allows you to choose your difficulty. Yellow is Easy. Orange is Normal. Red is Hard.
Choose Yellow. This will allow you to play with only three colours on a playing field that is 10 columns wide, which makes getting combos MUCH easier, despite you sometimes having puyo pieces that are 2x2 in size drop down from the top of the screen.
On this easy mode, you'll be playing with puyos that are red, blue, and green in colour. For the sake of readability, pretend that each button below is the puyo pieces, and you'll see the setup you want to use:
If you follow something similar to the above pattern, you should have no problem getting chains of close to and above 10. Obviously, the above pattern is moving from the left side of the screen, so you can get rid of the 2x2 puyo pieces that drop on the right side of the screen.
You can see this method in action in the video I have made below: