The book doesn't have that line exactly. The first relevant line is in Chapter 33:
“You stand, Harry Potter, upon the remains of my late father,” [Voldemort] hissed softly. “A Muggle and a fool . . . very like your dear mother. But they both had their uses, did they not? Your mother died to defend you as a child... and I killed my father, and see how useful he has proved himself, in death...”
Voldemort's father was actually a Muggle, not even a mudblood like Hermonie or Lily. He's clearly calling Lily a fool.
And in the following Chapter 34:
“I said, bow,” Voldemort said, raising his wand — and Harry felt his spine curve as though a huge, invisible hand were bending him ruthlessly forward, and the Death Eaters laughed harder than ever.
“Very good,” said Voldemort softly, and as he raised his wand the pressure bearing down upon Harry lifted too. “And now you face me, like a man, straight-backed and proud, the way your father died..."
The movie boils down the two chapters, merging the dialogue. Providing a confusing line without further context.
Interestingly enough, the script has him calling her a mongrel, a.k.a. mudblood:
VOLDEMORT: Atta boy Harry, your parents would be proud. Especially your filthy mongrel mother. I'm going to kill you Harry Potter, I'm going to destroy you. After tonight no one will ever again question my powers. After tonight if they speak of you they'll speak only of how you begged for death, and I being a merciful lord obliged. Get up.
The line was likely changed due to the real world insulting phrase. Biracial people, especially kids (the target audience) get slurred as mongrel or mutt all the time in real life. Changing the phrase would fit with the intent.
That or it is an error that slipped by production. Both the books and movies are well known for continuity issues.