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That is where they used to put the preamp on the old basses ...
That "little box" is a tone block. You can get them made from various types/species of wood, and each different type will change the tone of your bass. You can even get one made from steel if you like to play metal.
It's a black box, like a flight recorder, so that if your band ever has a train wreck they can go back and analyse the black box and see if was the bassists fault!

They could fit in there because they didn't use batteries. They had to be wound like watches. The automatic winding models required that you move around on stage enough to keep it going.