Ajose scored 13 goals while on loan at Knill's previous club, Bury, last season, prompting the boss to move for him once more.
However, he has been unable to replicate a similar deal to bring the young striker to Glanford Park.
"We believe that Nicky is probably going to go elsewhere, to the Championship," Knill admitted to the Scunthorpe Telegraph.
"Good luck to him. I have always said he is a good player. The good thing is that we have been part of his development.
"That is our job to help players achieve their potential."