Daley, look at it this way - she has used racist language around you your whole life and YOU aren't racist, YOU don't use racist words because you think they are acceptable. So it doesn't follow that your son will pick up on it. He won't be spending large, long periods of time with her, I'm guessing, and kids aren't that bothered about great-grandparents on the whole. Plus, and I don't want to upset you, if she's elderly and in poor health as you describe, she might not be around long enough for this to become a real issue, sorry.
I do feel for you though. I loathe racism, and am not of the opinion that you ignore it in old folk just because that's what was normal in ye olden days. I think TheCrunch has it right - if she says something racist in front of your child, you leave. E.v.e.r.y. S.i.n.g.l.e. t.i.m.e.
In fact, you should start doing that technique on her now, whilst you are pregnant. Tell her, Gran, I love you very much, but I am not going to tolerate your racism anymore. Every time you say something racist, I am going to leave or ask you to leave.
I had a racist old relative (one of those you call Uncle, but he's not and you don't quite understand how you're related!) when I was younger (they died in my teens). I told them that they were being racist, that it was disgusting, that it made them look ignorant, nasty and thick, and that what they were saying was illogical and obviously not true (comments about certains races smelling, or being less intelligent, etc.). I used to get told off by other relatives for being disrespectful, or rocking the boat, but I just kept saying that the person creating the problem was the racist, and if they stopped being racist, there's be no awkward situation.
I finally got through to him by talking about WWII, which he had fought in - I pointed out that it was racism like his that had led to the Holocaust, and that it made no sense that he had fought Hitler when he thought like him. If your Gran was alive during the war, and mentions it, try pointing out that by being racist, she's aligning herself with Hitler. I've used this point to a couple of other racist old people in the past, and they do seem to get it.