I’d stay with a worsted weight. The yarn I used for the washcloth would be fine, but you could also use something with some alpaca in it. I’ve used the Berroco Modern Cotton which was softer than the yarn for the washcloth, but did not have alpaca in it.
I used a 100% cotton yarn for these washcloths. Cotton is far more absorbent than a polyester, so is a good material for a washcloth. The yarn is a worsted weight and I used size 6 needles. These hand knit washcloths measure 11 inches by 11 inches. Adjust your cast on if you want something smaller or bigger. I find them the perfect size.
I also completed a couple of circular washcloths which I’ll give away at some point. One washcloth is crocheted and the other is knitted. I used Sugar ‘n Cream yarn for these washcloths as well.