I agree with all that's said so far. I teach kids to knit at schools where I sub all the time--especially SP-ED kids. I keep an extra (easy) project going and let them try knitting on it. It's in the round, and they like how the stitches look.
I usually start teaching by showing them how to hold the needles and yarn. Then I show them how stitches are made--sometimes I even take a few stitches off (TINK) and show them the anatomy of the stitch.
Depending on the kids, I sometimes teach them a mantra, like "In through the front door, once around the back, peek through the window and off jumps jack."
I would also suggest you have them start with yarn that's easy to see the stitches, but make sure they LIKE it and that it FEELS good! Keep it light, have fun and make sure they understand that mistakes are expected! Knitting is for the process. Taking it out means you get to Ribbit....and have MORE fun knitting! (okay, that may be a little sappy, but you DON'T want them feeling like mistakes are unusual and have them end up
We want them to
Hope this helps! I love to spread the fun of knitting!