You must have the deluxe heater. The heater knob you speak of is connected to the shut off valve. There will be 2 connections on the firewall for it. Run one hose from the thermostat housing connection to one of these connections. Run another hose from the other connection, through the firewall, to the heater core. A third hose will run from the heater core, out the firewall, to the water pump connection.
It is very common to find that the thermostatic switch (shut-off valve) no longer works. You may need to re-build it.
