I sympathize. Think about why you feel this way and then apply reason and logic to your assumptions. You can change the way you think and feel by focusing on your thoughts and then telling yourself the opposite.
Positive affirmations help me. Say over and over to yourself that it's OK that she's called grandma. Then fake it until you make it. Gradually your mind will change.
Know that it's good for your kids and grandkids to have another loving person in their lives.
If it's just the name that upsets you (not the relationship) perhaps you could suggest that they call her something else. She could be Nana, Nona, Grammy, just a few possibilities. Or call yourself something else.
It is confusing to have several Grandmas. My grandchildren have several grandmas. We go by Grandma and our first name if there's a chance for confusion. Each grandchild has their birth parent's parents and then their step father's mother and the grandparents of their half siblings. I feel that they're rich in love.