It is always better to use the culture medium to dilute the stock solution into test concentrations. Why? The cells are cultured and normally grow in the presence of that culture medium. Therefore, the medium has no inhibitory (killing) effect on the cells. Thus, any effect you have during the duration of the experiment will be attributed to your extract since the medium had already proven to be safe.
Alternatively, you can go a head with the ratio you have but make sure your negative control is made of water and medium in that same ratio void of or without the extract.