Make a little sandwich with the fabric squares right sides together and the batting on the bottom.
Cut a matching piece of ribbon approx. 4" long. Pin the ribbon in a loop between the two layers of fabric.
Sew with 1/4" seams all the way around, leaving a 2" opening for turning.
Turn square right side out. Your batting should now be on the inside and your ribbon loop should be on the outside. Pin 2" opening shut and top stitch all the way around.
Place your ruler on the inside of your square matching the side corners. (the loop corner being the top) Mark a line from corner to corner. This will be your sewing line as you sew the towel on.
Press your dishtowel in half.
Along the pressed crease, sew a basting stitch. You can also use a gathering stitch if your machine has one. You can also do this by hand if you want.
Gently pull the loose ends to gather your dish towel in the middle.
Lay your fabric square on top (with marked line up) matching the corners to each side of the gathered towel.
Taking care to make sure the towel is laying straight, sew across your marked line. (don't forget to change your stitch length back to the normal setting)
These make great neighbor gifts for Christmas. Add a little tag that says, "May the Christmas Spirit 'hang around' all year long!"