This site maintained by the folklorist D.L. Ashliman has numerous European examples. The story is catalogued as Tale Type 766, but this implies that it is a folktale - a story told as fiction - rather than a legend - a story generally told to be believed. As is often the case, stories float between the two genres, but when the Finn Antti Aarne (1867-1925)began his tale type index, he included many of the more widespread legends, probably because he thought to include migratory legends as well as the folktales that showed even more of an inclination to diffuse. This story should properly be catalogued as a legend since it is generally believed.
It is not possible to answer the core of your question - why is this legend so widespread - except to say that it is a good story. Why, after all, is the Star Wars cycle so popular? Perhaps more importantly, the sleeping hero and/or the sleeping army gives evidence to a widespread belief that the supernatural world has the ability to suspend people for long periods of time. Sometimes these enchantments are in a state of sleep while other times the subject merely spends the evening dancing or enjoying what he (it is usually a man) perceives is a short time in the supernatural realm only to find that when he returns a century or more has passed. Either way, this was a common concept in Europe, and Tale Type 766 gives good illustration for this belief, so it diffused easily.
The British folklorist Katharine Briggs writes of this: "The theme of a sleeping champion in a cave under a hill is common through Europe. Sometimes the hero is Charlemagne, sometimes Barbarossa, sometimes King Marko, sometimes Holger the Dane. In Britain it was most commonly King Arthur in the Matter of Britain legends, or in Ireland it was Finn Mac Cumhal, though sometimes it was a mysterious, unspecified champion." An Encyclopedia of Fairies, Hobgoblins, Brownies, Bogies, and Other Supernatural Creatures (New York: Pantheon Books, 1976). In her usual fashion, Briggs is more description than analytical, so we cannot look to her for an answer to your question.
Although I don't believe it will answer your question you may want to look at the work of the capable folklorist, J. R. Simpson, “King Arthur’s Enchanted Sleep: Early Nineteenth Century Legends,” Folklore 97 (1986).
edit: small corrections to the text
The question presumes a non-factual answer - you are asking for an interpretation of human behavior. I'll give you a view, which is familiar to schools of thought derived from Carl Jung's works.
The purpose of myths and legends is to answer the question of "how to act". Myths and legends served much the same purpose as biblical stories. They were intended to describe certain transformations of character and to guide behavior, thereby giving meaning and historical context to human life.
When viewed from this angle, the "sleeping hero" folktales communicate the idea that anyone can become a legendary hero. It works in two stages. First, young humans will take the story literally and believe they are protected by a legendary hero sleeping nearby, who will come to their aid in a time of trouble. As these humans mature, they are supposed to realize that this is a "paternalistic deception" and that they as adults are now responsible for the upkeep of such paternalistic deception - and by implication they are now responsible for being the awakening hero, should need for heroes arise.
To answer the obvious question of why there isn't a way more widespread story, which describes the idea of a child growing up to be a hero instead of this more roundabout way, then that's a quirk of human psychology. We internalize more willingly ideas, which arise internally. The "sleeping hero" story is something, which a human will learn in one form, but the meaning of which will be transformed as the perspective of the human is changed from child to adult. As this re-interpretation happens internally, it makes the myth "stick" better in the mind of a human. "Grow up and defend the tribe" is what writers would describe as "too on-the-nose". "There's a sleeping hero protecting us all and, hey, now that you're an adult, you are that sleeping hero, wink-wink, nudge-nudge" is a lot more subtle and therefore a more viral myth. It also creates an exclusive secret world of tribal leaders - those who understand the hidden purpose of myths as inspirational.
Again, this is not intended as a "true answer". It's just one way of interpreting why certain stories have been "more sticky" through human history.