How to Knit in Quilting Style
For this style you will need many shades of the same color, but small amounts will do just fine. Copy your picture onto graph paper and divide it into big squares. My favorite size is 10 stitches by about 12 rows(depending on the gauge). The # of rows should give the same length as the 10 sts, so a gauge piece can help. 
Next you need to gather your yarns. Have as many shades as you can for each color group. Once you have your ‘piles of yarn’, decide which color goes on what square and mark it by gluing a small piece of that yarn, or marking it with colored pencils.
Now you are set to start knitting, and here is a trick:
In order to enhance the feeling of sawing where two squares meet, knit the two yarns together to create a bold and chunky row. Otherwise just remember to twist your yarns when you switch colors. The knitting is quite simple and straight forward, the only time when you need to pay close attention to what you are doing is the first and the last row of new colors.
Picture Knitting 