The option to manage this feature is tucked inside the Settings > Account > Privacy > Groups menu. There you will see three more options - 'Everyone', 'My contacts', and 'Nobody'. Selecting 'Everyone' will let everyone with your WhatsApp number add you to a group. The 'My contacts' option will limit the option to people whose numbers are already saved in your contacts. And, choosing the 'Nobody' option will prevent everyone from adding you to a group.
Those who cannot add you to a group will be able to send you a private invitation to join a group. You will then have 72 hours to accept the invitation after which the invite will expire.
This feature is rolling out to the users on the latest version of WhatsApp, and it will reach everyone around the globe in the coming weeks.