Please put on your walking shoes when you walk on the treadmill to give you enough support and traction. The effort involved with a covered foot will be less and the impact in the body felt will be drastically reduced. The impact going through the foot is partly what might affect your knees.
You must also make sure you warm up the whole body before going for a walk, whether outdoors or on the treadmill.
As regards gaining health benefits, any aerobic activity like what you are doing now, will help you reach that goal. But along with that, you have to couple your efforts with a sensible diet to aid the process.