Linda, thanks for posting the pictures.
It looks like there is a house in the background? Is it at the same level as the highest terrace?
So you want to dig out a pond at the highest point? As you dig it out the soil will be added to the outside of the dam? As already stated by R Scott.
Seems like if you dug deep enough you could have a pond with the bottom equal in elevation with the lower terraces?
You just need to make sure to pack the soil that will be the dam, you do not want the force of the water to break the dam, and have some sort of spillway or pipe for overflow.
I think there are some great threads in the ponds forum that might help too.
https://permies.com/forums/f-89/ponds