Grasshoppers do not have eyes on their knees. The term grasshopper eyes on knees refers to clinical finding seen in patients with a certain knee condition where the patella moves. It makes the knee appear to have eyes that resemble a grasshopper.
Grasshoppers detect moving objects using their compound eyes. These eyes cause a flicker effects as objects move past them, allowing grasshoppers to see moving objects better than objects that are still.