The popping noise is most likely in his hock, but almost certainly originates in the stifle. It is something to do with the ligament (or tendon?) that runs down from stifle to hock--but don't ask me to be specific about what catches on what and then releases to make that popping sound. While it is related to the stifle it won't necessarily mean that your horse will have a problem with locking stifle. Many horses that have popping hocks never have their stifle lock up.
This doesn't seem to cause the horse pain nor even discomfort--though one horse I saw with this condition did have a slight hesitation when bringing the one leg forward--it was as if the tendon caught briefly and the leg couldn't move quite right until it popped free. A horse with an actual locked stifle will be unable to bring his leg forward at all--the stifle locks in the extended position, which also leaves the hock extended--and this IS painful.
You may find that your horse will outgrow the popping hocks--and it's possible that he will always have it. What to do for it--keep his feet well trimmed. Do not let the hind feet get overly long, and when trimming the hind feet it helps to roll the toes a little bit. Easier breakover seems to let the horse move without popping. I trim feet for a few other people now, and one horse that I trim will get popping quite bad if his feet get long. As soon as he gets trimmed he stops popping, and as long as his feet are trimmed often enough (say every 6 weeks as opposed to being left for 3 months!) the popping does not return.