If your grandmother does not have any mobility issues, and the wedding is very formal, which it sounds like it is; then she will probably want to be in a longer length dress.
However, if it is possible that a longer dress could cause her to have difficulty walking or even feel unsteady, then a tea-length dress would certainly do just fine, and she (and you) would be much more comfortable.
I would have her try on several dresses for fit, comfort, and 'walkability'.
What length dress should the grandmother of the bride wear?
