We went through this. Took three years of her shitty, selfish, neurotic behaviour, and a cancer diagnosis, before now DH would acknowledge it. Once he did, she went totally deranged and as such we are now NC.
However I do understand. We spent a whole year arguing about the same thing to the point I could quote what was going to be said and when it was going to be said. It made me feel awful, like I was second best.
Looking back, I don't think anything could have been done. She would have been jealous of anyone, even the queen, taking DH "away" from her and her influence. however I wish I had gone above and beyond to just ignore her, not gone out of my way to help her and patronised her as best I could given the circumstances. Aka just not gave her headroom, or made excuses for her shitty behaviour.
It likely wouldn't have changed anything, and DH still would have explosive arguments with me, but at least I could have been more prepared when everything finally came to a head and not cared as much.
I would engage your DP on it and force him to face up to the fact her outright rudeness makes you feel bad. Then stop engaging with her. She can only play these games if you give her headspace and likely as not will stop when she realises you dont care.
Hope this helps. Sorry if it isnt totally coherent, running on 2 hrs sleep and my brain feels like mush lol xx