To sign grandmother, extend and separate your fingers, then starting with your thumb on your chin, move your hand forward on one arc and then a second arc. It is just as if you're tracing two rainbows.
The sign for grandmother is the same as the sign for grandfather, except from the chin instead of the forehead. Generally in sign language, the female signs are done below the nose, and the males signs are above the nose.
Help your baby learn the sign by signaling it every time her grandmother gains her interest. Nothing helps your baby learn their signs more than if you can get a few other people really into it. Teaching the signs for grandmother is a sly way of getting grandparents to become sign advocates. The first time your baby signs grandmother, it will be like the two share their own secret language, and it will be addictive. You can use the sign for grandmother broadly to describe all older women, or you can reserve it just for her grandmother(s).
Your baby will most likely develop a deep bond with "Nana". Because babies have more than one grandma, you can make a compound sign by including the first initial of each grandma.