It is narrated from Sayyiduna Hanzalah bin Huzaym (may Allah be pleased with him) that I presented myself before the Prophet (peace and blessings of Allah be upon him) and saw that he (peace be upon him) was sitting cross-legged.
Hadith Referenceالادب المفرد / كتاب / 1179
Hadith Gradingالألبانی:صحيح
Hadith Takhrij«صحيح : أخرجه الطبراني فى الكبير : 13/4 و ابن قانع فى معجم الصحابة ، ص : 204 - أنظر الصحيحة : 2954»
Explanation & Benefits
Shaykh Maulana Usman Muneeb
Benefits and Issues: ➊ In some versions, this narration has been attributed to the Musnad of Dhiyal bin Ubayd as if he were a Companion, whereas this is not the case. Most likely, the word "from" (عن) has been omitted in the chain there, because Dhiyal narrates from his grandfather Hanzalah, as is found in al-Mu'jam al-Kabir of al-Tabarani. (: al-Mu'jam al-Kabir 4/13, Hadith: 3494)
➋ From this, it is understood that sitting cross-legged (with both legs folded and knees up) is permissible. In fact, in one narration, it is mentioned that after completing the Fajr prayer, the Prophet (sallallahu alayhi wa sallam) would also sit in this manner and remain seated until the sun had risen. (: Sunan Abi Dawud, al-Sahihah lil-Albani: 2954)
Source: Fadlullah al-Ahad: Urdu Commentary on al-Adab al-Mufrad, Page: 1179