Personally I would talk to the grandparents of the daughter. Tell them this is a confusing age for her. Ask them if they are open to being grandparents to all your children showing no favorites. If they are everyone has the chance to have a extra grandma and grandpa. When you daughter is ready or is able to understand that she had a biological father who died when she was a baby, then tell her. Tell the grandparents not to tell her about her father until YOU not THEM decide. IF they can except these terms or similar terms YOU set it's a win win situation. If this is something they can not do at this time then tell them it is not the right time, and suggest introducing them as "friends of the family" a couple times a year. I would also start explaining to your daughter in age appropriate terms that she has 2 daddies and one is in heaven and both loved her very much. If you tell or mention that the father wanted nothing to do with her then she will feel insecure. Why didn't my daddy love me... etc. Most children can not comprehend death but as they come to understand it hurt less if they are told upfront instead of later in their teen years etc.
Just my opinion dont know if it helps.
I'm in the same sittuation. My daughter is 7 1/2 and my husband is not her biological father. My ex currently gave up all his rights. The best advice that I can give you is what others have given me and has worked.
1. If your child does not know the family then don't push her to.
2. You will know in your heart when it was time to tell her.
3. If she starts asking questions about why her last name is different
then slowly start telling her.
you don't want to tell her all at once, it's too much for a little child to take in all at once.