The second part of the strategy is counterconditioning, where you reward your dog every time your grandson comes around. Give him a dog treat when your grandson comes in the room and show your dog affection the entire time. After a while, he will associate your grandson with rewards such as treats and affection.
At some point, he should be relaxed and wag his tail when your grandson shows up. At that point you can allow very minimal, closely monitored physical contact.
Hopefully your dog will become comfortable around your grandson, and they will become best buddies. Remember to go slowly, and keep your dog on a leash at all times when around your grandson. If you don't see any improvement after a number of visits, consider consulting a trainer or veterinary behaviorist.