Mother in Law's mental harrasment

I am 33 years old housewife and married to a 41 year old man who is working in sales . I have a 3 year old son . My mother in law is 72 years old and widow. She stays with us mostly. She is a pension holder. Now my point is she is not mentally and physically fit . She can't hear and doesn't agree to take any precautions for that . She is unable to take any kind of responsibility. But for the whole day she is looking at me , judging me and continuously giving instructions. After several protest by me and my husband she is not ready to listen and makes me mad with her behaviour. She thinks I am her paid maid and I have to run my family according to her instructions. She doesn't know where to stop and where to draw the line .. It is getting very difficult for me to stay here . What should I do ? She doesn't have any other work in her life buring looking what I am doing.. specially with my son . She won't take a penny of responsibility but expects that I will treat my son exactly the way she wants .. what should I do ?