Your husband's EW still talks to his mother because that's her children's grandmother. That relationship does not change because he is now married to you, and I honestly don't think it's fair or realistic of you to expect it to. Being married to someone who was married before, especially if they have kids, is complicated. You need to be able to accept the fact that connections existed well before anyone knew you, even if it makes you uncomfortable - because it can be really, really uncomfortable. It takes being quite strong to not feel threatened by that. However, you cannot control your MIL or the EW's behavior and you cannot prohibit them from talking to each other. Their relationship has nothing to do with you and as hard as it is, you need to find a way to just let it be. Cutting her off from having a relationship with you is not a good solution.
I've been there, done that, with the EW and MIL in contact with each other, and the EW badmouthing everyone, and I know it's hard. You will come out looking much better, and FEELING much better, if you handle it gracefully rather than issuing ultimatums.
That relationship ended, but it was good practice for my current marriage. My DH didn't even have kids with his EW, but my MIL is still close to her. She's pretty much said that she's always going to be part of the family and there's nothing we can do about it. She still has her picture up on the wall in her house. One of my SILs feels the same way. They can talk and send each other Christmas cards as much as they want, but I don't give it any of my attention or let it bother me. She was part of their life for 7 years, they loved her and continue to. Their feelings for her didn't change because she's no longer married to their son/brother. I can't change that and it's not my business to try.
Again, I know this is hard stuff. I think one of the biggest lessons I learned from being a stepparent was that there are just some things I don't and will not have any control over, so stop trying to control them. This is one of the biggies. I wish you luck, calm and patience with this.