Scala is well-suited for building internal domain-specific languages (DSLs) due to its functional programming capabilities and static typing. Some key advantages of using Scala for DSLs include its elegant and succinct syntax, type inference, implicit conversions, higher-order functions, pattern matching, and for-comprehensions. These features allow building DSLs that are concise yet expressive for the domain and prevent invalid operations. The document provides examples of using Scala to build DSLs for tasks like defining cloud computing resources and processing machine specifications.