Keep those needles handy so that every spare moment can be spent knitting, not looking for needles.
First you need to cut your pieces, 1 outer fabric, 1 lining fabric, and 1 piece of wadding. I cut mine to 21" width and 36" length. The length needs to be this long otherwise the top flap won't hold the needles in but the width could be smaller if you don't have many needles and only want a couple of pockets.
Arrange with the wadding on the bottom, then the outer fabric right side up and then the lining fabric right side down. Take a length of ribbon ( I used about 120cm but if you are doing a thinner width you won't need it so long. It's better to put in too much though as you can trim it afterwards), fold in half and put the long ends in between the outer and lining fabrics with just a little of the folded end sticking out. Pin it about halfway up one of the long sides.
Sew around the edge catching all 3 layers in the seam and stitching over the ribbon. Leave about a 6" gap on one of the sides. Turn the whole thing right side out so that the fabrics are both showing their right sides, the wadding is in the middle, and the ribbon is sticking out the side. Top stitch around the whole thing closing up the gap as you go.
Fold up the short edge by 10" and sew the edges to make a big pocket, then sew lines up the big pocket about every 2" or so to separate it into smaller pockets. I used a denim needle for this as there is a lot of layers. Put all your needles in and roll up.
Tie the ribbon in a bow and trim the ends if necessary.