Knitted ornaments are small, quick and a great home for leftover yarn. Each one below is free on the designer’s own site, and most take an evening or less.
I have listed them from easiest to most fiddly. The first few are knit flat on straight needles with garter stitch or simple shaping. Later ones are worked in the round and stuffed. There is also a tiny sweater with real sleeves. The first six use worsted or DK yarn and needles between 3.75 and 4.5 mm (US 5 to 7). The last six are DROPS designs: little trees, hearts, houses, Nordic baubles and a garter stitch Santa.
Free knitted Christmas ornament patterns
1. Gift Card Envelope Christmas Ornament
Designer Ashlea at Heart Hook Home. Here is an ornament with a job: it holds a gift card on the tree. You cast on 20 stitches, knit 40 rows of garter stitch to make a square, then fold and seam it into an envelope. Ashlea uses Red Heart With Love in Holly Berry on 4.5 mm (US 7) needles, and the finished envelope is about 4.5 inches square. The designer wrote it for absolute beginners. The hanger and closure use a simple crochet chain, so you will need a hook for that last step.

2. How to Knit Christmas Ball Ornaments
Designer Carolina at So Woolly. No double-pointed needles needed for these round baubles. They are knit flat on 4 mm (US 6) straight needles, shaped with kfb increases and k2tog decreases, then seamed and stuffed. Carolina uses about 20 grams each of two colors of worsted cotton or wool. As the designer puts it, if you can knit and purl, you can make one. A video walks through the steps. The page does not give a finished size, so yours will depend on your yarn and how firmly you stuff it.

3. Mini Hat Ornaments
Designer Susan at A Box of Twine. Each little hat takes only about 10 yards of worsted yarn, so this is a good use for leftovers. Susan knits them flat on 3.75 mm (US 5) needles with a ribbed brim, a stockinette body and k2tog decreases, then seams the back. They come out about 6 inches tall and 2 inches wide at the brim. Gauge does not matter here. The free pattern covers solid-color hats. The striped and snowflake versions in the photos come in a paid bundle.

4. Knitted Christmas Tree Ornament
Designer Louise Bollanos at Handy Little Me. A small, padded tree made from two knitted pieces that are stuffed and stitched together. It uses scraps of green DK yarn on 4 mm (US 6) needles and only needs knit, purl and k2tog. The finished tree is about 3.5 inches tall and 4 inches wide. Louise suggests decorating it with buttons, beads or tiny appliqued hearts. The designer rates it easy, for beginners and advanced beginners. You may sell the trees you make, and an ad-free PDF is sold separately.

5. Christmas Snowballs
Designer Steffi at Skillfully Tangled. These soft white balls are knit from teddy or faux fur yarn, such as Rico Baby Teddy Aran. You cast on 35 stitches and knit in the round until the tube is about as tall as it is wide, then stuff it and close it. Steffi notes that at 17 stitches to 4 inches, the snowballs come out about 3.5 inches across. The designer also points out that the final size depends on how much stuffing you use. Use double-pointed or circular needles sized for your yarn.

6. Tiny Christmas Sweater Ornament
Designer Shellie Wilson at CraftBits. This is the most detailed ornament here. The tiny sweater is knit top down in the round, then the sleeves are separated and worked one at a time. It needs only about 10 grams of DK yarn on a short 4.5 mm circular needle or double-pointed needles. The body is 2 inches wide and 2.5 inches tall, or 5 inches across with the sleeves. You will use kfb increases and ribbing. Gauge is not critical, and you can add embroidery or duplicate stitch for a holiday motif.

7. Christmas Woods (DROPS Extra 0-1609)
Designer DROPS Design, free on the DROPS website. Little knitted Christmas trees worked bottom up on 3 mm (US 2.5) double-pointed needles in DROPS Lima. Each tree is about 9 cm (3½ in) wide and 12 cm (4½ in) tall, not counting the trunk. The sample uses olive, off white and almond, so you can make a small forest in natural shades. Gauge is 23 stitches and 32 rows to 10 cm (4 in).

8. Winter Pine Hearts (DROPS Extra 0-1636)
Designer DROPS Design, free on the DROPS website. Soft hearts knit in the round in stockinette, from the bottom up, in DROPS Fiesta. The sample mixes several shades of green, from herb garden to dark ivy. Each heart is about 10 cm (4 in) wide and 10 cm (4 in) tall, worked on 3.5 mm (US 4) double-pointed needles. Hang one on the tree or tie it to a gift.

9. Merry Village (DROPS Extra 0-1625)
Designer DROPS Design, free on the DROPS website. Tiny knitted houses for the tree, worked in the round from the bottom up on 3 mm (US 2.5) double-pointed needles. You can use DROPS Alpaca for a house about 6.5 cm (2½ in) wide and 9 cm (3½ in) tall, or DROPS Lima for one about 7 by 10 cm (3 by 4 in). Make several in different colors for a little Christmas village.

10. New Traditions (DROPS Extra 0-1601)
Designer DROPS Design, free on the DROPS website. Red and white baubles with a Nordic pattern, knit in the round from the bottom up in DROPS Lima on 3 mm (US 2.5) double-pointed needles. Each bauble is about 7 cm (3 in) across and is filled with wadding. A 3 mm (US 2.5) crochet hook is also listed in the materials. It is a good small project for practicing colorwork.

11. Forest Garland (DROPS Extra 0-1544)
Designer DROPS Design, free on the DROPS website. A simple garter stitch tree ornament, knit top down on 3.5 mm (US 4) straight needles in DROPS Paris, a cotton yarn. It measures about 8 cm (3 in) wide and 10 cm (4 in) long, plus a hanging loop, with an off white cord as trim. Garter stitch and straight needles make it one of the easiest ornaments here.

12. Santa’s Parade (DROPS Extra 0-1543)
Designer DROPS Design, free on the DROPS website. A garter stitch Santa ornament in bordeaux and off white DROPS Paris, with a little forest green as an accent. Like the tree above, it is knit top down on 3.5 mm (US 4) straight needles and measures about 8 by 10 cm (3 by 4 in). Make a few Santas and a few trees to string together as a garland.

For help with kfb, k2tog and other terms, my Knitting Stitches Guide explains each one.
You might also like: Knitted Christmas Stocking Patterns