I think there are a few of options available to you here. I've only recently started mucking about with leather and I've not yet acquired the skills of ST
but it seems to me you could do one of the following depending on where the stretch is it doesn't sound too hard to do...
You could glue in a packing piece of leather inside the sheath with contact adhesive to create a better friction grip on the handle or blade
Or you could possibly cut the stitching out and restitch it tighter and try re wet forming it.
Or you could sew on a leather strap and use press studs to hold the knife in place again depending on the design of the knife/sheath.