The correct option is B grinned
He 'grinned' at me to show he appreciated the joke.
'Glimpsed' is to glance, 'Grinned' is to smile, 'Sneered' is to smirk, 'Stared' is to look at something for a long time, 'Watched' is to see. So, it's pretty clear that the correct option would be 'grinned'. So, option B is correct and the others are not.