Can the grandmother breastfeed her grandchild?
Yes, but in this case he will be a brother to all his uncles and aunts and hence, he will not be able to marry any of their offspring.
“your foster mothers who gave you suck, your foster milk suckling sisters”[al-Nisa’ 4:23]
Al-Bukhaari (2645) narrated that Ibn ‘Abbaas (may Allaah be pleased with him) said: The Prophet (peace and blessings of Allaah be upon him) said concerning the daughter of Hamzah: “She is not permissible for me (to marry), because what becomes mahram (forbidden for marriage) through breastfeeding is that which become mahram through blood ties. And she is the daughter of my brother through breastfeeding”