You need to find someone to feed to Nullah. His first casual dialogue option does give a hint by telling the player: "Seeing as how this area is rather close to Rett and Mitryll's cave, you can't help but to wonder if they ended up running into [Nullah] at some point."
After encountering Nullah and learning his name, you can head back into Rett's bedroom and there will be option of telling Rett about Nullah using his own hunting grounds. This will cause Rett to go confront the yellow dragon, and thus cause him to get devoured. Try it out yourself and see how the scene plays out!