Are hydras one of the smallest organisms?

Not even close.
A typical hydra is a few millimeters long.
Copepods are much more common, and a typical copepod is less than 2 millimeters long.

Organisms in the Archaea and Bacteria groups are typically a few micrometers in size.

(So a thousand typical bacteria set end-to-end are about the same length as a typical hydra).