I you dilute your ethanolic extracts with water, some non-polar lipophilic compounds in your extracts are likely to precipitate out. DMSO is more appropriate to dissolve your extracts if it is to be used for further biological evaluation.
You can use water for dissolving your plant extract, but some compounds precipitate.
In my opinion DMSO is best solvent for dissolving any plant extract and its benefits are you can store DMSO mediated stock for long time at 4 degree Celsius in refrigerator for several months.
Prepare 100 mg/ml stock of your plant extract in DMSO and further dilute it up to 10 or 20 mg/ml in water (just before analysis).
Dear dmso is always a better option, u cn make ur stock solution in it n ten can try with aqueous ( working solution) by dmso is alwaz better as ur sample cn withstand longer