compare-windows-sync-string-size is a variable defined in `compare-w.el'.
Its value is

Size of string from one window that is searched in second window.

Small number makes difference regions more fine-grained, but it
may fail by finding the wrong match. The bigger number makes
difference regions more coarse-grained.

The default value 32 is good for the most cases.

You can customize this variable.

This variable was introduced, or its default value was changed, in version 22.1 of Emacs.