2000 Ford Ranger Odd Engine Failure - Lock up?

I was driving down the highway, and my engine had suddenly failed. I was accelerating to merge onto the highway.

My check engine light and my check gauge light had came on and then my engine instantly failed. I pulled over to the side of the highway to try to restart the engine. I got nothing in return, all I could hear was a "click".

I got out of the truck to check my oil, and it was very low. Small amounts of a gray smoke came out of the dipstick valve as well.

People are telling me that there is a sensor inside the oil pan that will shut off the vehicle's engine when there is not enough motor oil in the car/truck. This is to prevent engine lock up. Apparently all I have to do is add oil to the vehicle and it will run just fine after that. Is this true?

Please note that I did not hear ANY noises of stress when my engine had shut off. I honestly did not even notice the engine had shut off until I hit the gas a few times and realized I'm going no where.

Is it likely that my engine is locked? Or is there such a sensor?