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How's this sentence?

"Everyone here knows each other."
Comments  
The sentence is fine.

CB
AnonymousHow's this sentence?
"Everyone here knows each other."

You could also say, "Everyone here knows one another."
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OK, but is mine grammatical?
As Cool Breeze said, your sentence is fine.

I would prefer to say "everyone here knows everybody else", just to make the reciprocity more definite and inclusive.
PhilipAs Cool Breeze said, your sentence is fine.

I would prefer to say "everyone here knows everybody else", just to make the reciprocity more definite and inclusive.

For me, that could mean: everyone here knows everybody outside the group making up "everyone".

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AnonymousOK, but is mine grammatical?

Yes, your sentence is grammatical. Some grammarians say that 'each other' is used of two entities and 'one another' is used of more than two. However, this rule is seldom followed.