I would talk to your dentist. He/she may recommend some sort of mouth guard. Custom ones will run you a pretty penny (unless you have a comprehensive dental plan), but you may be able to find an over-the-counter one (e.g. one that you boil and then bite to set the mold).
You don't mention your child's age, but according to this overview from the Mayo Clinic, it (Bruxism aka Teeth Grinding) could be as a result of:
answered 09 Dec '09, 05:12