This isn't answered in the film and I can't find any interviews where it was addressed.
In the film, the army is based on the real-life Terracotta Army, as evidenced by this interview with the director. Thus, the film was supposed to give the "real" reason as to why the Terracotta Army exists today, as opposed to the actual reason - to act as burial art for the first Emperor of China and protect him in the afterlife.
Whilst in real life the Terracotta Army was buried with the Emperor, in the film they obviously turned to stone around the palace, along with the Dragon Emperor. Therefore, I think the most obvious solution at this point was that they were moved to the hidden location by the sorceress and people under her command and the Dragon Emperor, perhaps out of some respect for his position, was contorted into a different position.
I say this is the most obvious reason to me, as they were hardly going to leave the Emperor and his army around and within the palace for all of eternity. They had to be put somewhere! So I believe they were moved to their location by the sorceress and others (with booby traps warding everyone off) until their eventual discovered by Alex O'Connell.