Final answer:
The text includes the phrase "This was found among the papers of the Late Diedrich Knickerbocker" to add authenticity and mystery to the story.
Step-by-step explanation:
The text includes the phrase "This was found among the papers of the Late Diedrich Knickerbocker" in order to create a sense of authenticity and add an element of mystery to the story. By attributing the source of the legend to a specific person, Washington Irving enhances the believability of the tale. The name "Diedrich Knickerbocker" itself is a fictional character created by Irving, who is presented as the author of the story. This technique is often used in literature to create an illusion of reality and engage the reader in the narrative.