The Squire's Tale (The Squire's Tales #1) by Gerald Morris
Life for the young orphan Terence has been peaceful, living with Trevisant, the old Hermit in a quiet, isolated wood.
That is, until the day a strange green sprite leads him to Gawain, King Arthur's nephew, who is on his way to Camelot hoping to be knighted. Trevisant can see the future and knows that Terence must leave to serve as Gawain's squire. From that moment on, Terence's life is filled with heart-stopping adventure as he helps damsels-in-distress, fights battles with devious men, and protects King Arthur from his many enemies.
Along the way, Terence is amazed at his skills and new-found magical abilities. Were these a gift from his unknown parents? As Gawain continues his quest for knighthood, Terence searches for answers to the riddles in his own past.