Nice way to host knight, ancient character (4)
I believe the answer is:
rune
'ancient character' is the definition.
(I've seen this before)
'nice way to host knight' is the wordplay.
'nice way' becomes 'rue' (I've seen this before).
'to host' means one lot of letters goes inside another.
'knight' becomes 'n' (chess).
'rue' placed around 'n' is 'RUNE'.
(Other definitions for rune that I've seen before include "Mystic symbol" , "Old Scandinavian letter" , "Letter of an ancient Germanic alphabet" , "Mystical symbol" , "Mysterious character" .)