Background: Growing evidences have advocated the potential benefits of traditional Chinese exercise (TCE) on symptomatic improvement of knee osteoarthritis (KOA). However, most of them have been derived from cross-sectional studies or case reports; the effectiveness of TCE therapies has not been fully assessed with a randomized control trial (RCT). In order to evaluate the combined clinical effectiveness of TCE for KOA, we conducted a systematic review and meta-analysis on the existing RCTs on KOA. Methods: A systematic search was performed in four electronic databases: PubMed, Web of Science, Cochrane Library, and EMBASE from the time of their inception to February 2020. All eligible RCTs were included in which TCE was utilized for treating KOA as compared to a control group. Two reviewers independently extracted the data and evaluated the risk of bias following the Cochrane Risk of Bias Tool for RCT. The symptoms of KOA evaluated by the Western Ontario and McMaster Universities Arthritis Index (WOMAC) and the Knee Injury and Osteoarthritis Outcome Score (KOOS) were regarded as the primary outcomes in this study. Each outcome measure was pooled by a standardized mean difference (SMD) with 95% confidence intervals (CI). A meta-analysis was applied with a random or fixed effect model for the collected data to calculate the summary SMD with 95% CI based on different statistical heterogeneity. In addition, subgroup analyses were used to investigate heterogeneity and sensitivity analysis was carried out for the results of the meta-analysis. Egger’s test and the funnel plots were used to examine the potential bias in the RCTs. Results: A total of 14 RCTs involving 815 patients with KOA were included. Compared with a control group; the synthesized data of TCE showed a significant improvement in WOMAC/KOOS pain score (SMD = −0.61; 95% CI: −0.86 to −0.37; p < 0.001), stiffness score (SMD = −0.75; 95% CI: −1.09 to −0.41; p < 0.001), and physical function score (SMD = −0.67; 95% CI: −0.82 to −0.53; p < 0.001). Conclusions: Our meta-analysis suggested that TCE may be effective in alleviating pain; relieving stiffness and improving the physical function for patients with KOA. Yet; given the methodological limitations of included RCTs in this meta-analysis; more high-quality RCTs with large sample size and long-term intervention are required to further confirm the effectiveness and underlying mechanisms of TCE for treating KOA.