Let us quickly run through the standard KK compactification. We start with a $d+1$ dimensional
theory
$$
S = \frac{1}{16\pi G_{d+1}} \int d^{d+1}x \sqrt{G} R_{d+1}
$$
More general actions on the $d+1$ dimensional space can be considered, but this will suffice for our purposes. The metric $G_{MN}$ can be decomposed as
$$
ds^2 = G_{MN} dx^M dx^N = e^{2\Phi} \left( dt + A_\mu dx^\mu \right)^2 + g_{\mu\nu} dx^\mu dx^\nu
$$
We assume now that $t$ is the compactified direction with $t \sim t + 2 \pi R$. The theory has the following symmetries
$d$-dimensional diffeomorphims, $x^\mu \to x'^\mu(x)$ under which $A_\mu$ and $g_{\mu\nu}$ transform as rank 1 and 2 tensors respectively.
Gauge transformations along the compactified directions, $t \to t + \lambda(x)$, $A_\mu \to A_\mu - \partial_\mu \lambda$. This symmetry essentially describes the local choice of origin in the compactified direction.
Now, if the length scales of our problem are large compared to the radius of the compactified circle $R$, we then assume that $\Phi$, $A_\mu$, and $g_{\mu\nu}$ are only functions of $x^\mu$ and not $t$. (This is only done here to make things simpler. One can consider the more general case where the fields are expanded into modes in the $t$ direction. This gives us massive particles in the $d$-dimensional space. We will not consider this here). With this assumption, we find
$$
R_{d+1} = R_d - 2 e^{-\Phi} \nabla^2 e^{\Phi} - \frac{1}{4} e^{2\Phi} F_{\mu\nu} F^{\mu\nu},~~ \sqrt{G} = e^{\Phi} \sqrt{g}
$$
The action then takes the form
$$
S = \frac{2\pi R}{16\pi G_{d+1}} \int d^d x \sqrt{g} e^{\Phi} \left[ R_d - \frac{1}{4} e^{2\Phi} F_{\mu\nu} F^{\mu\nu} + \nabla_\mu \Phi \nabla^\mu \Phi \right]
$$
Thus, we note that in the $d$-dimensional space, we have a gauge field and a scalar field. The action is not quite in the Einstein-Hilbert form since the scalar field $\Phi$ couples to $R_d$ and $F_{\mu\nu} F^{\mu\nu}$ non-trivially. Also, the kinetic term for $\Phi$ has the wrong sign. This field is called the dilaton.
To understand why $\Phi$ is called the dilaton (related to dilation, or in other words scale), let us go back to the $d+1$ dimensional metric. Consider the $S^1$ living at a fixed point $x^\mu$. The induced metric on this circle is
$$
ds^2_{S^1} = e^{2\Phi(x^\mu)} dt^2
$$
The size of this circle is
$$
\int ds_{S^1} = \int_0^{2\pi R} dt e^{\Phi(x^\mu)} = 2\pi R e^{\Phi(x^\mu)}
$$
Thus, we see that the effective radius of the circle at $x^\mu$ is $R e^{\Phi(x^\mu)}$. In other words the dilaton field controls the size of the circle.
As an aside, the compactified action above is written in what is called the string frame (name comes from string theory). It possible to go to the more standard Einstein frame (where the action takes the form $\sqrt{g} R$, etc) by doing a field redefinition $g_{\mu\nu} \to e^{2\omega} {\tilde g}_{\mu\nu}$ and appropriately choosing $\omega$. In this frame, the scalar kinetic term has the right sign. However, we still have a non-trivial coupling to $F_{\mu\nu}F^{\mu\nu}$.