OK I'm not sure when it was made but I do remember parts of the movie that may help.

OK lets see... its animated

There is a little girl princesses. Blonde hair um.. one scene she goes up into an attic sees her fairy god mother of grandmother... another main character is this boy.. brown hair... poor...
There are these trolls or something,leave in caves or under ground when the boy sings this certain song the trolls become weak or something? They wear there special shoes.. I can't remember specifically but.. something is wrong with there feet like... thats their weakness or some like that...
I'm pretty sure there's a dog side kick or cat? Well anyway I summed it up best I could!
I can't remember the title its killing me!

This is probably wrong, but it sounds so much like The Princess and the Goblins (http://en.wikipedia.org/wiki/The_Princess_and_the_Goblin_%28film%29).

Maybe?

The princess and the goblins is DEFINITELY IT. I remember watching it all the time.

The girl's name and the grandmother's name were both 'irene'.

HOLY CRAP YES!! Thank you sooooooo much! Yes yes that's it! Wow now I can finally sleep again!