Dorling Kindersley publish 'the Pocket Encyclopedia of Needle Craft' by Judy Britain, which covers knitting, sewing, crochet, quilting, embroidery and needlepoint. £9.99. It's definitely not a child's book, but depending on your granddaughters age it could be inspirational and helpful too.
Well done for teaching her to knit. I haven't been able to pin my 7 yo granddaughter down in one place long enough to teach her to knit, spin or sew. I'm hoping she'll be ready one day whist I'm still around.