The go-to way to check your hydration level is to observe the color of your urine. If you are well hydrated, your urine will be clear. If you are dehydrated, your urine will be bright yellow, or even orange if you are severely dehydrated. The increase in color is a sign that your body is attempting to preserve the little water it has left, therefore the waste products in your urine are very concentrated. Note that foods like beets and certain medications or supplements can increase color in your urine as well.
Another hydration test that some people use is to pinch the skin at the back of the hand and observe how quickly the skin returns to its original position. If it takes more than one or two seconds, you are dehydrated. This can also be done on the skin right under the eye. The thing about this test it that if it does in fact take one or two seconds, you are already seriously dehydrated, thus it doesn't exactly predict relative hydration. Plus, as we age, the elasticity of our skin decreases, which can affect the accuracy of this test.
Never the less, this is a good example of how dehydration can cause our skin to wrinkle and give it a limp, dull quality, whereas drinking water can make some wrinkles go away and give skin a plump, juicy look.
Overall, when you are well hydrated, you will be able to move better and think more clearly. If your skin is dry, or if you are experiencing muscle cramps, constipation, headaches, fatigue, or hunger, drink some water and see if your status improves. What have you got to lose?!