OH No....I am so sorry to hear this.....I would try to talk to her on an adult level and tell her how it makes you feel.
I am blessed my MIL LOVES my babies about as much as I do....she calls them her grand-doggies and even has their pictures in her home and wallet. Ha, ha....she is now sounding as NUTS as I am. She even comes and gets them for days with grandma....ah, ha...Oh the silliness, I know.
any way...I am so sorry to hear she hurts your feelings like that. Hang in there - ony you know the love between you and your babies.