Neural network techniques are widely applied to obtain high-quality distributed representations of words, i.e., word embeddings, to address text mining, information retrieval, and natural language processing tasks. Recently, efficient methods have been proposed to learn word embeddings from context that captures both semantic and syntactic relationships between words. However, it is challenging to handle unseen words or rare words with insufficient context. In this paper, inspired by the study on word recognition process in cognitive psychology, we propose to take advantage of seemingly less obvious but essentially important morphological knowledge to address these challenges. In particular, we introduce a novel neural network architecture called KNET that leverages both contextual information and morphological word similarity built based on morphological knowledge to learn word embeddings. Meanwhile, the learning architecture is also able to refine the pre-defined morphological knowledge and obtain more accurate word similarity. Experiments on an analogical reasoning task and a word similarity task both demonstrate that the proposed KNET framework can greatly enhance the effectiveness of word embeddings.