I am shocked at the ignorance and fuckwittery on this thread.
OP - please read and re-read Tethersend and Greensleeves' posts, they know what they are talking about.
For a child not to speak at school, or to speak only to a very limited audience, is NOT normal, even when they speak normally at home.
And yes, of course the teacher should pick up on it and raise their concerns with you. How are YOU supposed to know what is going on at school?
From experience, I would suggest discussing again with the teacher, and also contacting the school's SENCO.
Unfortunately many teachers seem to adopt the 'wait and see' approach, which isn't ideal as Selective Mutism benefits from early intervention, and it often isn't the case that a child simply 'grows out of it'. Many years of social and educational development can be compromised due to the isolation caused by not being able to communicate with the people you spend a large part of the day with.
I would second the suggestion of SMIRA's website - they have a lot of further info and a forum. Google Selective Mutism, most of the info on the web is reasonably good.
Here's a definition from ChildMind.org
"Selective mutism (SM) is an anxiety disorder in which a child is unable to speak in some settings and to some people. A child with SM may talk normally at home, for instance, or when alone with her parents, but cannot speak at all, or speak above a whisper, in other social settings?at school, in public, or at extended family gatherings. Parents and teachers often think the child is willful and refuses to speak, or speak loud enough to be heard, but the child experiences it as an inability. It can cause severe distress?she can?t communicate even if she is in pain, or, say, needs to use the bathroom?and prevent her from participating in school and other age-appropriate activities. It should not be confused with the reluctance to speak a child adapting to a new language might exhibit, or shyness in the first few weeks at a new school."