The Proper foot position for setting up when going into at turn is important for giving you the flexibility and extra leverage over the bike in high speed cornering situations.
In order to drag knee you will need to set up PRIOR to the turn: Foot should be on the peg using the ball of your foot with the heel rested on top of the heel guard. Doing this alone will automatically set your knee up with the proper 90* angle needed for knee dragging.
Combine that with you hanging your body off of the bike ( confidence and practice willing) and you will be banging knee like Rossi.
if you have any questions dont hesitate to ask. ill be posting pics soon