I think that whatever the situation may be between your daughter and the baby's father, it isn't the child's fault and she shouldn't grow up deprived of her paternal grandparents, nor they of their grandchild.
HOWEVER, I'm afraid it doesn't matter what you or I think. It is your daughter's decision to make and her place to deal with any future consequences.
There are several things to consider here. One day your daughter will have to explain to her daughter why she doesn't know her nan and grandad on her dad's side. You can be sure that your grandaughter will ask about them at some point in the future.
Perhaps you could talk to your daughter about this. Gently explain to her that your grandaughter could very likely grow up to resent her mother for keeping her from her other granny and grandad if there isn't a very good reason for it. The fact that her Daddy chose not to be part of her life is going to be hard enough for her to deal with.
Your daughter may actually have a good reason that you are not aware of. For that reason alone I would not be inclined to take this matter into your own hands. Unless of course when you said, "Should we track them down...", you meant your daughter included.
If your daughter does decide to tell them, it will be hard for these other grandparents to understand why it took two years to let them know.
I do hope that in the end everything works out for the best, whatever way it goes.