They say clotted blood's good for a cloth dressing (5)
I believe the answer is:
gauze
'dressing' is the definition.
(gauze is a kind of dressing)
I cannot understand how the rest of the clue works.
Can you help me to learn more?
(Other definitions for gauze that I've seen before include "Medical cloth" , "Surgical dressing of muslin" , "first-aid material" , "Medicinal cloth" , "Thin transparent material" .)