My mother had very similar with my grandmother, her MIL.
My MIL was horrific to her for many years - actively trying to drive a wedge between my parents, favouring her other DILs over my mother, etc. It was odd as it really echoed the horrible treatment she'd had from her own MIL.
After my grandfather went into residential care and even more after he died, she totally changed and piecing it all together it's pretty clear that, at a minimum, he was very emotionally abusive and controlling to her and she (entirely wrongly) visited that on the "weakest" person ie the first DIL who joined the family in her early 20s.
I don't know if my mum ever really forgave her for her past actions, and she certainly never forgot. But she did manage to move past it and acknowledge that the behaviour had changed, and was able to meet my grandmother where she was in a positive spirit of moving forwards together.
It's a great example of how we can never know more than a fraction of what's going on with someone, and how even with those we're close to, we don't always know what's affecting them and influence their behaviour.
It sounds quite similar to your situation: your MIL is trying to show you through her actions and behaviour that she's changed and that she values you. You can make a choice about how you respond to that change.
I think it can be helpful to acknowledge to yourself that the past isn't something that you will ever forget or that you'll ever think is ok. But that you will also make space for someone's personal growth and change and that while you will probably always approach with caution, you can make space for who she is now, not just who she was.