A patient gave me the old potholder (pictured below with the replacement I recently made) years ago. I love it, but it has been used to the point of not being able to do its job of protecting my hand from hot pans any longer.
Updated 3/2017-- photos (except my own) and all links (except to my own posts) removed as many no longer active. and it was easier than checking each one.
I did a Google search and found the instructions for making more. (photo credit/ original from here). The original came from "The How To Book: Do it Yourself with Stevens Utica Sheets & Towels", by J.P. Stevens & Co, 1978.
My new wash cloth was not quite square, so I first squared it up.

Then I folded it as shown and then used my serger to sew the edges together.

I should have changed out my threads, but didn’t as it’s “only a potholder.”

I then crocheted the edges using a simple scalloped stitch which really makes it look so much better.

Here is a great source for crocheted edging.