is this even legal?

It would be legal if tf they are divorced. If they are not divorced or he is not dead then it is illegal. The fact she has a child that is his niece has nothing illegal about it. 

If his brother is divorced or dead, then yes, he can marry his brother's wife. It's rare but it happens. This wouldn't be the first case.

The niece will remain as the niece unless he adopts her. Not far-fetched. It happens.

What's not legal is marrying his brother's wife if they were still married. That would be a case of bigamy against the wife.

What's worse if he marries his niece. That would be incest.

Just let them love each other and try not to have a half of a heart attack telling us ... it's fine... promise...

I dont feel it is right, i feel sorry for the niece and the brother who lost his wife

Our President-elect has a son Hunter, who did the very same thing. He married his dead brother's wife. Yes, it's legal as there was no blood relationship between the two of them.

It's legal.   It's almost certainly a really bad idea but it's legal.

Leave aside the relationship .If she is a married woman how can you marry her too .That means the woman will be having two husbands .It is illegal unless polygamy is permitted in your country .

You cannot marry your brother's wife because she is already married to him.

In my country it's not legal to be married to two people at the same time. It has long, likely thousands of years long, been traditional to wed widowed wives of deceived brothers or cousins etc. It's not Expected now, like it was many years ago, but it's not particularly uncommon. 

Yes it's legal. It's happened often where someone marries a brother or sisters widow or widower or after a divorce. They are NOT related. Totally different DNA.