I just did something like this, although in my case it didn't turn out quite as expected...
I used 2.5" flannel and folded it in half, putting the raw edges between the layers of top and backing/batting. I stitched around and used the birthing method (sewing together that last little turning hole is challenging but possible). I then trimmed little snips into the flange, making it fringed. The only problem in my case was that I was going for a raggedy look with the fringe curling up after washing, but then realized that I had little loops – I should had put the folded edge into the seam, not the raw edges. Now I would have to cut all the loops to make it raggedy, so I'm thinking of leaving the little loops.
I will try to post a picture later. I say go for it!