Pascal's law states that the pressure exerted on an incompressible fluid and in equilibrium within a container of non-deformable walls is transmitted with equal intensity in all directions and at all points of the fluid. In other words, it could be summed up further, stating that any pressure exerted on a fluid will spread over the entire substance evenly.
When Superman puts the stone on one side of the hydraulic system, the weight of the stone creates a pressure on the fluid that ends up being transmitted to lift the piston attached to the large stone. In order for the law of conservation of energy to exist and be maintained, the small stone has to move a lot so that the large stone moves only slightly, but moves safely.