How would your sister feel if you call him on it?
In our family, as long as we're not demeaning the child or being rude, it's OK for us to discipline each other's kids. Ideally of course, the parent steps in, but sometimes the parents don't see it, sometimes they aren't there.
We had about a 6 month campaign with my nephew when he was a pre-teen to teach him that he had to greet the whole family when he came over to visit (which was frequently). My oldest sister is quite a bit older than my brother and me, and so we were both at home going to college when he was in this stage. My nephew would arrive, slink off into the basement to see my brother, and not say a word to grandma and grandpa or anyone else who was in the house. So, we'd go get him, inform him that it was rude to enter a house and not greet people, tell him that it hurt our feelings, ask him to greet everyone, and then let him go back downstairs to my brother. We had a similar campaign with him when he was younger about being a sore winner when he won board games.
In his case, I think that the combination of reinforced messages - politely expressed, but very firm "your behavior is rude" really helped him see beyond himself. He's a very sensitive, intense person and it was just hard for him to see beyond himself at that age. He's grown into a lovely person, mostly because his parents worked REALLY hard with him on seeing the effect of his actions on other people. What we were doing was just helping his parents. But the combined message from everyone in the family did help too.
Personally, I would ignore the eye rolling and faces, and work with him on (a) being kind to his cousin and (b) tone of voice. Luckily, your dd is in a stage developmentally where she doesn't get sarcasm and put downs unless it's really blatant. But, calling him on being mean to her is also sticking up for her. I wouldn't let it go unnoticed. Maybe just describing "that was a very rude thing to say." or "your voice sounds very rude right now. How can you change it to sound more polite?"