Can I use an external monitor with my late 2009 21.5 inch iMac?
The support page shows that you can connect it to an external monitor.

Apple Mini DisplayPort video port
Using the Mini DisplayPort video output port, mirror video or extend the size of your Mac OS X desktop (extended desktop mode) with a compatible DVI (Digital Visual Interface) display or VGA (Video Graphics Display) or projector using the appropriate Mini DisplayPort adapter: