I agree with Catnapper - it's best to seperate them and let Gracie get used to his smell first. It might only take a few days or you may need to give it a week. Going slowly is always best.

You could also give him a towel or blanket to sleep on and then take it out to Gracie to let her smell it and put her smell on it then return it to him. Little things like that will help them get used to each other without all the hissing and growling, hopefully.