If you can, take a look at lots of wooden handled knives to see how the grain runs.
From those, you might get a sense of where in a log the scales were split/sawn out.
Likely all hardwoods as they sand more effectively than the shredding that can happen with soft/conifer wood.
Alder here goes from cheese to bone when it dries out. Good for your application.
What are your chances to score some seasoned, knot free & straight-grained hard firewood?
Cut the fresh pieces over long as end splitting (2-4") is almost inevitable. Peel off all the bark, easiest when the sap runs in the spring.
Paint the ends with anything (house paint, carpenter's glue) to slow down the rate of water loss from the open ends.
If it's big enough pieces, you might split a few lengthwise. They dry faster and it relieves some of the shrinkage stress with water loss in drying.
How long? Wood carvers usuall assume 1"/year, dried outdoors under cover but not cooked in a shed.
For example, a 4" stick ought be good to work with in 2+ years (2" in to the core.)
Hand tools? Power tools? depends on what you have.
Me? For building up wood carving tools, I can buy mahogany and rosewood off cut junk 1/8" thick from the guitar industry.
I do some sort of a glue-up and plane that down to shape and size.
Size? In a fist grip on the assembled knife, the tips of your second and third fingers should just touch the fat ball part of your thumb.
From a square blank, that's at least 3/4" x 3/4". 7/8" square is ideal, 1" square is too fat, even for my big hands.