As markschum says.  The trick is to get the angles right.
Try leaning the figure forward and slanting the towel so the
edge where it first meets the neck is the lower part of the towel.
You want to give the towel a chance to fold up against the
neck and shoulders before the rear part starts to drape.

Also, the Marble node plugged into Bump makes a very
good terry-cloth texture.  Scale the Marble down until its
swirls look very small.

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