It is doubtful that he provided over one-half of his own support if he lived in your home. It would also be doubtful that he provided over one-half of his daughters support if she also lived in your home.
You should be able to claim both your son and your granddaughter on your tax return.
Your son and granddaughter would be claimed under the Qualifying Child rules if they meet all the requirements.
If your son files a tax return and you are claiming both him and your granddaughter on your tax return, then he must indicate on his return that he can be claimed as a dependent. He cannot enter his daughter as a dependent on his tax return if he is being claimed as a dependent.
To be a Qualifying Child -
1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
2. The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student or (c) any age and permanently and totally disabled.
3. The child must have lived with you for more than half of the year. Temporary absences while away at college are considered living with you.
4. The child must not have provided more than half of his or her own support for the year.
5. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child.
6. The child must be a U.S. citizen or U.S., Canada or Mexico resident for some portion of the year.
7. The child must be younger than you unless disabled.
@DoninGA is correct.
Keep in mind that he is only eligible for the Family Tax Credit now that he has turned 17. The Family Tax Credit is worth $500. See: What is the $500 Credit for Other Dependents (“Family Tax Credit”)?
Claiming your granddaughter would be eligible for up to $2,000. See: What is the Child Tax Credit?