Every yorkie is different so its hard to say. Mine is 5lbs and LOVES kids and babies. I got her when she was 13 weeks old and wasn't really around babies/toddlers until she was 3 years old. She does really well with them and LOVES the fact that the toddler my mom babysits always has snacks in hand (mainly cheerios and goldfish). the baby loves to give her cheerios.
So in my opinion it depends on the personality of the yorkie. Some are very tolerant and some are not.
If you are interested in getting a puppy I'd wait another year or so for your grandson to get a little bigger. In the meantime I'd take him around friends dogs (who are tolerant of children) and teach him to be "nice" with the doggies. a lot of toddlers don't understand petting. They like to pat instead and little dogs usually don't like this.
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