Old relative to bind broken knee in cloth (7)
I believe the answer is:
nankeen
'cloth' is the definition.
(I know that nankeen is a type of cloth)
'old relative to bind broken knee' is the wordplay.
'old relative' becomes 'nan' (informal term for a grandmother).
'to bind' indicates putting letters inside.
'broken' indicates an anagram.
'knee' with letters rearranged gives 'nkee'.
'nan' going around 'nkee' is 'NANKEEN'.
'in' acts as a link.
(Other definitions for nankeen that I've seen before include "Buff-coloured cotton cloth" , "Buff colour(ed cloth)" , "trouser material" , "Hard-wearing fabric, originally from China" , "Yellowish stuff" .)