Now that you have lost all confidence in this department head, your next step is actually a combination of the two options noted in your letter. You should definitely meet with him, and you should be extremely discrete in telling him anything in the future.
You asked if you should confront him about his comments, but a confrontation is not the right way to go. All it will generate is defensiveness and a likely argument. A better approach is to use questions. Tell him that you were really surprised when one of his employees spoke to you about matters that were supposed to be kept confidential, and then ask him how this could have happened.
Although unlikely, there may be a miraculous explanation. Either way, do not convict the department head before you have heard his story. His response will set the stage for your next move. That move can range from a reprimand to a clarification of your expectations regarding information you provide, along with consequences for breaches.
Regardless of what he says, the real message for you is to remember this incident well. The next time you think about sharing confidential information, think twice.
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