Your interaction with your DiL should start by enquiring about her mother, in kind and caring way, let her understand that you realise that life must be difficult for her.
Dementia is not something to be embarrassed or ashamed off. We are all in danger of developing it. I suspect that your DiL's mother, might have early onset dementia, which might be what makes her embarrassed by her mothers illness.
If you can be kind compassionate and empathetic over this lady's illness, your son's partner, will, hopefully, learn to relax in your company, knowing that you really understand the problems of living with someone like her mother, and if you are unembarrassed and entirely accepting of her mother's illness, she will perhaps, gradually be happy for you to meet her and to have you in the house she and your son live in.
If you have no experience of dementia or have never met anyone with it, go to a site like the Alzheimers site www.alzheimers.org.uk/ also Age Concern and other reputable sites.