Here is the explanation:
97. At the right edge of the Altar the server provides water and wine to be poured into the Chalice; a mingling which represents Jesus’ humanity and Divinity, symbolized by the Water and Blood which flowed from His side. The Celebrant puts Wine into the Chalice, and then adds a little water, for our Lord Himself when instituting the Holy Eucharist, mixed a little Water with the Wine, and the Church continues to observe this custom to this day.
98. Holy Mother Church says: Why speak here of the dignity of man? Why recall here, the Divinity and Humanity of Jesus Christ? Because the Wine and Water used here are figures: the Wine represents Jesus Christ as God, the Water represents Him as Man. The weakness of the Water, compared with the strength of the Wine, expresses the difference, which exists between the Humanity and the Divinity of our Lord Jesus Christ. We must see ourselves too in this water, since it was us, who by Mary, furnished Our Lord with the Humanity. Thus, does Holy Mother Church express herself on this subject, in sentiments of admiration; thus does she love to put forward the true dignity of man.
99. Holy Mother Church puts before us, first of all, the Mystery of the Incarnation, and by means of this thought of the Water and the Wine being mingled together in one liquid remedy; thus does she recall the union of the Humanity and the Divinity of Our Lord, and our seeing this, asks of God that we too may participate in the Divinity of our Lord Himself, just as St. Peter expresses it, in his second Epistle: “that by the promises which were fulfilled in Jesus Christ, we may be made participators of the Divine Nature”.
100. This deification, begun on earth by Sanctifying Grace, will be completed in Heaven in Glory. In the earthly Paradise, the devil told Eve that if she and Adam would only follow his counsel, both of them would be as gods. Here he lied; for then, as now, by the Faithful fulfillment of the Divine precepts alone, can man ever reach God. In Heaven, we shall be as Gods, not that we shall become so, by nature, but that in the Beatific Vision, we shall see God even as He sees Himself, and our state will be that of creatures placed immediately below the Divinity. Holy Church is determined on holding this Truth before our mental gaze, and she does so in this Prayer, while speaking to us of the Incarnation of the Word, the very Principle of man’s true greatness.
101. The use of Water and Wine is then the figure of two mysteries at once: the mystery of the union of the human with the Divine Nature in Our Lord; and the union of Jesus Christ with His Church, which is composed of all the Faithful.
102. Water is so indispensable for the Holy Sacrifice of the Mass, that if it should happen that none could be procured, it would be necessary to abstain from saying Mass. On the other hand, Water may never be mingled in so large a proportion as to alter the Wine itself; for in such case, Consecration would not take place.
Taken from The Holy Sacrifice of the Mass, by Father Mark Gregorczyk. See this book at createspace.com/3471267