A terahertz quantum cascade laser, operating at lambda=159 microm and exploiting the in-plane confinement arising from perpendicular magnetic field, is used to investigate the physics of electrons confined on excited subbands in the regime of a large ratio of the magnetic field confinement energy to the photon energy. As the magnetic field is increased above about 6 T, and the temperature lowered below 20 K, the devices are characterized by a very low threshold current density, with values as low as J(th)=1A/cm(2), and an increase of gain by five times the low field value. We show that, as with the quantum Hall effect, the key physical process is the localization of the carriers. Evidences for resonant electron-electron scattering processes are directly obtained from light intensity and transport measurements.