I made this Wool Cloth Farming guide to help out players who want to farm the cloths instead of buying them from the Auction House. I decided to search for places with a high density of mobs that I could kill and drop Wool Cloth. I traveled around Azeroth, and after a while, I made a list of places.
You will get a lot of Linen Cloth while farming. This does not mean that these places are bad for farming Wool Cloth. Usually, every mob drops both Linen and Wool Cloth.
There were no major changes to Wool Cloth drop rates, so this guide can be used for Cataclysm Classic and Retail WoW.
Wool Cloth
Wetlands
Best place to farm Wool Cloth is on the road east of Greenwarden's Grove in Wetlands. There is a fight going on there between Dragonmaw Whelpstealers and Ebon Slavehunters. Both mobs are hostile and drop Wool Cloth, and their respawn rate is extremely quick.
Note for Horde players: This is an Alliance zone, so lower-level horde players might have trouble getting here.
Hillsbrad Foothills - Horde
Stormpike Engineers on Gavin's Naze in Hillsbrad foothills is a great place to farm Wool Cloth. They respawn almost instantly. You'll never run out.
Shadowfang Keep in Silverpine Forest
If your level is high enough, you can also farm Wool Cloth in Shadowfang Keep which is located near the borders of Gilneas in southern Silverpine Forest.
After you clear the instance, go outside and reset it by right-clicking over your portrait, then click the "Reset all instance" button. This restarts the whole instance and all mobs will be back. You can only do 10 instance runs in an hour, so sometimes you might have to wait a bit. (5 per hour in Cataclysm Classic)
Once you are done farming Wool Cloth, visit my Silk Cloth farming guide.