The anterior cruciate ligament (ACL) tear is one of the most common knee injuries causing instability to the knee joint. Current methods of diagnosis fail to meet the ergonomic, reliability and reproducibility requirements. Thus, the wearable sensors are gaining momentum to overcome current challenges. This paper aims at proposing a wearable capacitive based sensor system that shows a good potential in substituting the currently used methods for the diagnosis of ACL rupture. The developed sensor system measures the internal tibial rotation of the knee. It is compact and lightweight. Being cable free, it can be worn as a patch, without impeding the freedom of movement of the physician. Moreover, it can be powered with a battery or wireless. Both methods make it compact, ergonomic, easy for the patient to wear and for the doctor to use. To analyze the suitability of the developed sensing system, data from a knee simulator setup and three healthy volunteers (2 Males and 1 Female) are compared and analyzed. In all the patients, above 15° for every 5° angle variation, a relative change of capacitance with respect to its initial value of 0.01 is observed. These results are comparable with the knee simulator’s data with a max RMSE of 0.002. Below 15° the system was additionally able to measure a gender-based difference of rotation due to the higher flexibility of ligaments in females. For them the sensitivity below and above 15° is comparable, for male the sensitivity below 15° is lower. The results show that the developed system has good potential in substituting the currently used method for the diagnosis of ACL rupture and paves the way toward the continuous observation in free movement of knee laxity.