I think giving your son a reply or two that he can use in a scripted way might help, if he's not sure how to respond or might make things worse. I like the response of "well then tell your parents you want to apply" if they say they should be in the class, too. If they are saying he doesn't belong there then maybe something along the lines of "I belong wherever Ms. Teacher tells me to go" might take the conflict out of the situation.
If it continues you might want to help him come up with a plan to discuss it with the teacher or ask him permission for you to talk to the teacher. I agree with not letting it go too far but you also want to give him a chance to work through it on his own.
FWIW, MrWiggly deals with kids telling him he's too young for 3rd grade, calling him a liar about his age and stuff like that. He's getting better at responding to it all the time. And we talk about it at home so he understands that the other kids are in the wrong and being rude. Of course there was last year when he turned 7 but he had finally just agreed with everyone that he was *already* 7, so he let them all think he was turning 8! He seemed to have the right "I don't really care what they think" attitude though. I think that's a good thing for a kid to be able to fall back on.
