3M makes a self-fusing rubber electrical tape that would probably work well. There are two varieties one with adhesive and the other without. The adhesive helps to keep it in place as you start the wrap. With either one, you would wrap it around the knob one or two revolutions then cut and stretch the cut end as you press it to the previous layer. It will fuse to the under layer and be almost seamless. After wrapping the knob you can cut it flush to the sides with a sharp blade, like an Exacto or a utility knife.
I buy it at Home Depot.
Shrink tubing would probably work ok too, but would not be as "grippy". Probably also hard to buy in diameters larger than about 3/4 inch in small quantities. A heat gun works best for shrinking it, but a kitchen stove works well in a pinch.
Plasti-dip would do the trick too, most likely, but I don't like working with the stuff because of the heavy solvent odor.