Short version:

Gear ratio calculations for bike normally include three numbers: number of chainring teeth, number of rear sprocket teeth, and rear wheel diameter.

Each number actually represents a lever length. Higher tooth counts represent longer levers (the lever length is the distance from the rotational center to the point of contact with the chain). So does a larger wheel.

Sheldon Brown simply added crank arm length (the most obviously lever-like of the levers involved in bike gearing) to the calculation.