- *Don't* use the word "rude." He may be rude to correct everyone, but this would put him on the defensive.
-*Don't* try to cover it over with humor. If he doesn't understand that you're serious, he may send one-liners right back and keep doing it, and then it's even more embarassing when he finally understands you want him to stop.
*Don't* speak for everyone else - although if this is a habit that he is willing to try to break, he will probably stop correcting everyone, not just you.
I would opt for a simple pre-emptive strike when you can talk just the two of you:
"Hey BIL, I know that sometimes my grammar bothers you, but I hate being corrected in front of other people. I'm happy to have you say something when we're in private, but would you mind just letting things slide when other people are around? Thanks!"