All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger.
First of all, we ask Allah to give you better than her, to reward you for her loss and to make her precede you into the Paradise.
According to the agreement of the scholars when a Muslim dies, he should be buried in Muslim graveyards and it is not permissible for him/her to be buried in non-Muslim graveyards as he/she will be disturbed by their punishment. If we suppose that a Christian woman dies with a four-month old fetus from a Muslim man, she should neither be buried with Muslims because she is a non-Muslim nor buried with Christians because she carries a Muslim fetus. In this case, she should be buried separately [alone] with her back facing the Qiblah (direction of prayers) because the face of the fetus is towards her back, and if she is buried in this manner, the face of the Muslim fetus will be facing the Qiblah. The child is a Muslim because his father is a Muslim even though his mother is a non-Muslim according to the agreement of the scholars .
Since the scholars have decided this, then your wife made a mistake when she buried your daughter in non-Muslim graveyards; she should have asked if she didn’t know the ruling of burying the child in non-Muslim graveyards.
Nonetheless, since she was already buried in non-Muslim graveyards, if it is known that her corpus did not change or it is not feared to burst if it is transferred from that graveyard, then, in this case, it must be transferred to a Muslim graveyard if any. Otherwise, she should be transferred to an independent place.
It is not permissible to leave her corpus in that graveyard. If she had already deteriorated, her remains should be transferred to a Muslim graveyard or to a different place if possible and if there is no harm in doing so.
It is confirmed in an authentic Hadeeth that Moosa (i.e. Moses) carried the bones of Yusuf with him when he left Egypt to bury him in a better place than the one in which he was buried. [Al-Hakim]
In this Hadith… she (an old woman from the children of Israel) said: “Dig in this place, when they dug they found Yusuf’s bones, when they took them out of the earth, the street became lit as if it were during the day time…[i.e. they day during the night time]”
Allah knows best.