What did you say, when you were having that discussion, and the name came up? Because I'm assuming, since you've always loved the name, that you probably responded very positively. In fact, it would have been very strange, during a discussion about names, if you hadn't said "oh yes, I've always loved that name too" or words to that effect.
You see, realistically, she knows you are having a daughter, and she knows you're going to give her a name you love, so don't you think this will already have crossed her mind?
I also agree with Eglu's point, that it's not as though you're using the name of her actual child - you're using a name which she might theoretically have called another child if she'd had another girl.
As you've clearly talked about names before, why not start a discussion and mention this as one of your possible names? At least then, you can gauge her response. TBH though, I don't think the name is the significant thing. It may well be painful for her to watch a close friend have a daughter, after she lost her own, but I don't think the name will be a highly important thing - it's the loss of her daughter which is far bigger, and sadly, there is nothing that you can do which changes that