Here's the text of the relevant rule:
704.5r If a permanent has both a +1/+1 counter and a -1/-1 counter on it, N +1/+1 and N -1/-1 counters are removed from it, where N is the smaller of the number of +1/+1 and -1/-1 counters on it.
It's supposed to be pretty clear: if your creature has one +1/+1 counter and one -1/-1 counter on it, you remove one +1/+1 counter and one -1/-1 counter from it, leaving it with no counters. (One is the smaller of the numbers one and one.)
And then in the specific case of Kulrath Knight, yes, your creature will be able to attack and block, since it will have no counters on it.
If you find the "N" part of the rule confusing, you can really just think of it as "they cancel." If there are five +1/+1 counters and three -1/-1 counters, N is three (the smaller of five and three) and so you remove three of each. If there are one of each, then N is one (the smaller of one and one), and so you remove one of each. In every case, you're canceling out "as many as possible".