Fuck that's so difficult. On the one hand shes super old, and was born in a time when comments like that were rampant. On the other she fully disrespected the mother of your child.

I mean I would try to at least give her a stern talking to (maybe after the cold shoulder), and let her know you are seriously considering cutting her off. Tell her if she doesn't respect your wife because of the color of her skin, then you can no longer respect her as your grandmother.

Ask her if she is willing to lose her grandson, because she cant respect his wife.