I am a co-signer in the lease contract. Will that hold in a small claims court where I am suing her for the full deposit?
That seems unlikely. Lease contracts typically establish that tenants are jointly and severally liable. If your lease does not establish that, you would need to prove the landlord's agreement that your husband's acts with respect to the contract are not binding to you.
Even if you prove the aforementioned issue, the security deposit to be reimbursed would be prorated if the court decides that your husband essentially desisted from his portion of the deposit by saying to the landlord "you can keep your money".
Do we have a chance of winning the case?
Yes. It is unclear from your post whether the landlord's pretexts are tantamount to complying with her statutory obligation of timely notification of an itemized list of damages. Landlord-tenant statutes give a deadline (such as 30 days) for sending that notification. Non-compliance forfeits whatever entitlement the landlord would otherwise have as to the security deposit.
In case of landlord's compliance regarding that itemized list, you as tenants may dispute the legitimacy of the damages alleged therein.
Here the intricacy stems from your husband's statement "you can keep your money", which a reasonable person might construe as your husband's waiver --notwithstanding the contentious context-- of reimbursement. A waiver may be cognizable even if made reluctantly or under apparent reluctance. In fact, it is common for people to reluctantly waive their rights because they deem the matter not worth the hassle that court or quasi-judicial proceedings as well as extra-judicial disputes entail.
If necessary, you as tenants might want to posit that "your money" in that expression literally refers to the amount --if any-- that legitimately belongs to the landlord, and that the expression ought not to be confused with "you can keep the|that|my money". Your husband's expression literally reflects that he was not overreaching into landlord's funds, but that your husband's purpose simply was to recover [nothing more than] the security deposit.
Unless impracticable, I encourage you to litigate this matter in pro per because in doing so you would gain some exposure to legal proceedings. The amount involved is not too high, whence the matter would be litigated in Small Claims court (hence without being represented by a lawyer) anyway. With that exposure you will not be easily intimidated by lawyers/charlatans if your rights are violated in the future. But one lesson here is that that type of expressions can backfire because such expressions don't truly reflect the person's ultimate purpose and thus may be construed to that person's detriment.