I apologize for simply lifting this off Wikipedia, but I too had that question before, and this paragraph was helpful:
The Lotus position is adopted to allow the body to be held completely steady for long periods of time. As the body is steadied the mind becomes calm, the first step towards meditation. The posture applies pressure to the lower spine which may facilitate relaxation. The breath can slow down, muscular tension decrease and blood pressure subside. The coccygeal and sacral nerves are toned as the normally large blood flow to the legs is redirected to the abdominal region. Digestion may also be improved.
The Lotus position is adopted to allow the body to be held completely steady for long periods of time. As the body is steadied the mind becomes calm, the first step towards meditation. The posture applies pressure to the lower spine which may facilitate relaxation. The breath can slow down, muscular tension decrease and blood pressure subside. The coccygeal and sacral nerves are toned as the normally large blood flow to the legs is redirected to the abdominal region. Digestion may also be improved.