Volcanos were indeed known, and there were some really famous one like mount Etna (or Mongibelo) in Sicily and mount Vesuvius in Naples. Cortés would have been very much aware of those two, or at least one of them to some degree. We are not entirely sure on his early years, but it is likely that he served in the armies of the Great Captain Gonzalo Fernández de Córdoba in Naples or Sicily, so Mongibelo or Vesuvius would be a couple of places he would have actually seen.

However, we have to consider something entirely different for his surprise at Popocatépetl: the theory of climates. According to Aristotle and many other geographers, the Earth was divided into several climate zones, known in Latin as Zona Torrida, Zona Temperata, and Zona Frigida. The Popocatépetl is very much within the Zona Torrida, what we today call the Tropics. The fact that there would be snow within that climate zone is what weirded Cortés out. A volcano would not surprise him in the least, but snow in a torrid place was something contrary to the general knowledge of the climate zones as generally understood.

This point is indeed raised by Gonzalo Fernández de Oviedo, who says this on the matter:

abajaron e trujeron mucha nieve e carámbalos, para que los viese el capitán general e todos los demás; a los cuales paresció cosa muy nueva, porque algunos pilotos que allí se hallaron, decían que aquella tierra está en veinte grados de la línia equinocial, a esta parte, e así lo escribió Cortés a César.

Translation: They descended and brought a lot of snow and ice blocks, so the Captain General and the rest would see them; and to them it seemed a very new thing, for some pilots that were there said that that land was twenty degrees from the Equinoctial Line towards here, and so had Cortés written to Caesar.