Cut a 16-by-32 1/2-inch rectangle from a terrycloth towel. Cut it so that a finished edge of the towel ends up on one of the short ends.
Fold down 1/2 inch on the other short end and sew 1/4 inch from the fold to hem it.
Lay the towel wrong side down on a flat surface with a long edge closest to you. Fold the short end with the pre-finished edge in toward the center 7 1/2 inches. Fold the end you hemmed in toward the center 9 1/2 inches. There should be a 2-inch overlap down the center of the cover.
Sew along the top and bottom edges 1/2 inch from the edge to make a case with an opening on the back.
Turn the case right side out. Blow up the inflatable pillow and insert it into the case through the opening in the back.