Sayyiduna Abu Mas'ud Uqbah bin Amr (may Allah be pleased with him) says: We were sitting with the Messenger of Allah (peace and blessings be upon him) when a man came and sat down in front of the Messenger of Allah (peace and blessings be upon him), then said: O Messenger of Allah, as for the salam, we know it, but how should we send blessings upon you in our prayer, may Allah send His mercy upon you? The Messenger of Allah (peace and blessings be upon him) remained silent, until we wished that he had not asked at all. Then he (peace and blessings be upon him) said: "When you send blessings upon me (during the prayer), say: 'Allahumma salli 'ala Muhammadin an-nabiyyil-ummiyyi wa 'ala ali Muhammad, kama sallayta 'ala Ibrahima wa 'ala ali Ibrahim, wa barik 'ala Muhammadin an-nabiyyil-ummiyyi wa 'ala ali Muhammad, kama barakta 'ala Ibrahima wa 'ala ali Ibrahim, innaka Hamidun Majid' (O Allah, send Your mercy upon Muhammad (peace and blessings be upon him), who is the unlettered Prophet, and send down Your mercy upon his family too, just as You sent down mercy upon Ibrahim (peace be upon him) and the family of Ibrahim; and send down blessing upon Muhammad (peace and blessings be upon him), the unlettered Prophet, and send down mercy and blessings upon his family too, just as You sent down blessings upon Ibrahim (peace be upon him) and the family of Ibrahim. Indeed, You are worthy of praise and Glorious)."
Abu Abdullah says: This hadith is sahih (authentic) concerning sending blessings upon the Prophet (peace and blessings be upon him) in the prayers.
Hadith Referenceالسنن الكبرى للبيهقي / كتاب الصلاة / 2849