On second thought, are you in a position to take custody of him? I know that's not the preferred scenario, but if he goes back to her the abuse of this child will certainly continue. I don't think she'd fight you having custody and it also seems unlikely your son would since he's considering going back to her - his priority is his relationship with her, not his relationship with this boy.
Best wishes -
Roscoe, great that you're involved. It's completely rational that you fear for him - these are the kind of situations were the stepsons are abused and the bio parent turns a blind eye for some unknown reason. If you keep communications open, and always have the right to see your grandson on a weekly basis, things should work out. This kind of thing falls apart when the step parent is able to completely isolate the child and no one can see him outside of the nuclear family.
God bless you -
What is your son's position in this situation? Does he see what she is doing? If so, why does he let her? Being a mother-in-law is kind of difficult when there is this sort of problem. The solution lies with your son.