Tell her the truth if it ever comes up. Lee is her father's ex-wife's son. You KNOW that. You don't know if he's her half-brother or not, and neither does anyone else. I would respect my husband's wishes. There are lots of families that have "add-ons" who participate as family when they are totally unrelated. In our family, for instance, we have "Noni" who is a "grandparent" to my children. She is absolutely no relation to my younger two girls, but she was once my older girls' step-grandmother. I divorced their father and she ended up divorcing their grandfather, so she's not relation to them either. But she's OUR Noni and we all love her - even my husband who wasn't initially so sure he wanted to welcome former relatives of mine into the family system.
I think you need to have a heart to heart with Lee's wife. She may feel insecure with her own place in the family system. Just because Lee is comfortable with his relationship with Jeff, and probably you and your daughter, doesn't mean that she is comfortable in her role as in-law/non-law. She is also young and idealistic and assumes it would be better to have "full disclosure".
If you ever get the chance to discuss the situation with Lee's wife, why don't you turn it around and ask her if she is uncomfortable with the relationship as it stands with Jeff and Lee? The best way to do that is to ask her something like, "What is it about Lee's relationship to Jeff and us that you aren't comfortable with?" It's not a yes/no answer, and if you are a caring (I assume you are to have semi-adopted Lee as a quasi-step-son) you may be able to help her to share her own feelings about the situation. Who knows? She may just think it's "kind of wierd" and it may have no emotional issues at all loaded in. You can then agree with her, that it IS kind of different, but it's been this way for 25 years, and everyone involved has gotten used to it. You aren't trying to hide anything, everyone in the system is just living their lives the way they have been and it's never been an issue. Would it make a difference to her if she knew or didn't know that Lee was Jeff's son or not? Maybe put in those words, she would think it through and realize that knowing "the truth" isn't going to change Jeff or Lee's relationship, and if they are happy with it the way it is, it is the responsibility of the wives involved to also accept it and enjoy life as it comes.
I don't think your situation is on the caliber of a "BIG FAMILY SECRET". It's not dangerous, it's not going to hurt anyone. It's not as if there's been an affair going on during your marriage, and that your husband has a "secret family" somewhere that no one knows about. Whether Lee is your step-son or is just your husband's ex-wife's son doesn't really matter to the emotional bonds you guys have built over the years. Regardless of whose name is on the birth certificate, I think it's wonderful that your husband has enough love in his heart not to argue over "the details" of Lee's paternity. Whatever it is or isn't, is not Lee's fault, and your husband is a gem among men to simply love the baby, the boy and now the adult Lee has become. If you focus on those issues, especially if/when the question comes out of your daughter's mouth, then she will shrug it off, smile and say, "yup! That's MY dad !!" and be very proud of him.
Frankly I think it would be easier to find out the truth when your daughter is older, than at 10, when she is caught between childhood and the conset of her own hormonal changes$. I also think it would be easiest to address the question if it ever comes up from YOUR daughter. When/if it ever does, what diffuses it is your own attitude. If you are comfortable with the situation and relatinships, and you share the information within the framework of "normalcy" rather than as a crisis, she'll be absolutely fine with it.
The other option, Finding a way to "announce" it, or forcing a "BIG discussion" to share the information out of the blue blows the whole thing out of proportion. I would let it go for now, and if your daughter ever asks, tell her the truth -- that your husband doesn't know if he was the father or not, but he is a loving person and he helped to father Lee whether he was his son or not. It sounds as if he's a wonderful and loving man, and you are blessed to have enjoyed the last 25 years with him !!