He is still very young, and doesn't yet grasp that the word he is saying is something you don't want him to say. He obviously uses it in context, which really is funny (yet not funny, of course) Did he pick it up from your hubby? My 2yo will say "GOOD LORD!" when something exasperates him, thanks to my husband. *sheesh*
At this age, I would just ignore it. He will say it over and over and over if he gets a reaction from you. You can model other words to say, like "UH OH!" when you drop something. Or, when he says it, you can always say "Oops.. you dropped it. Let's say UH OH!" and see if he will follow suit.
If he were older, you could really work on helping him to understand that "S**T" isn't a word used in your house. And, instead, you can say "UH OH" or any other word chosen by your family.
He just isn't old enough yet to get that.
If your son says it in public and you know someone heard, I'd just roll your eyes and say "They are such parrots at this age! I am going to kill my husband!"
