Is it even certain that Brown--who after all could get re-elected Attorney General as long as he wanted to, as shown by his victories in the face of the Warren landslide of 1950 and the Knight near-landslide of 1954--would run against Knight if Knowland decided to stay in the Senate? According to *One Step from the White House: The Rise and Fall of Senator William F. Knowland* by Gayle B. Montgomery and James W. Johnson (Berkeley: University of California Press 1998) (all quotes in this post are from this source) "Attorney General Edmund G. 'Pat' Brown probably was the strongest the Democrats could offer, but he showed no early interest in leaving a secure post to seek the governorship. However, Brown's interest in the governorship surely was piqued by Knowland's announcement, which opened the possibility of a real Republican battle."
http://www.escholarship.org/editions/view?docId=ft4k4005jq&chunk.id=d0e4389&toc.depth=1&toc.id=&brand=ucpress
One reason that Brown might hesitate to run against Knight is that he might not be certain of getting labor support:
"Although Knowland tried to focus on the water issues, there were early warning signs that the union concerns might take over his campaign. There would be a right-to-work initiative on the November ballot, and the issue kept surfacing; moreover, Knowland would not back away from it. 'No person should have to pay tribute [to a union] before he can have a job,' he insisted. He talked of a time when Congress might find it necessary to regulate big unions just as corporations are regulated by antitrust regulations: While he was on his statewide 'test the waters' swing, the California Federation of Labor sent a letter out to its membership accusing Knowland of running on an antilabor platform. With prescience, the state AFL group predicted that Knowland's support of right-to-work laws would make labor the dominant issue in the 1958 fight for the governor's office. The mailing also reminded its readers that Governor Knight had pledged himself to veto a right-to-work law if it came before him. In contrast, Knowland--despite terming reporters' questions 'iffy'--said he would sign such legislation if it were equitable and fair.[18] The statement immediately presented the public with clear and sharp differences between the two powerful Republicans.
"Although there was growing opposition from organized labor, Knowland continued to win applause from mostly Republican groups when he stated his belief that every man has a right to employment even if he does not join a union. Although the right-to-work issue was beginning to worry Republican tacticians, Knowland mentioned it in virtually every speech. Asa Call, head of Pacific Mutual and probably one of the most powerful men in the California GOP, tried to warn Knowland. He told him the issue would enrage union members and they would mobilize against him. Knowland stubbornly refused to take the advice.[19] That stubbornness delighted the Knight camp, which happily pointed out to reporters that no one had run an antilabor campaign since Republican Frank F. Merriam lost the governorship in 1938..."
Knight nevertheless reluctantly went along with the "big switch" under pressure from Nixon and from Norman and Otis Chandler of the *Los Angeles Times.* Knight went to Eisenhower to protest, and Ike told him that he left California political matters to Nixon....
Anyway, I don't think you can judge how well either Knight or Knowland would have done running for re-election by their fiascoes after the "big switch" in OTL. The switch itself and the idea that there was some sort of deal involving Knight, Knowland, and Nixon undoubtedly became a major issue that hurt the California GOP considerably beyond the damage the party would have taken anyway from the 1957-8 recession and the right-to-work initiative. Knight in particular came out looking bad, a weak man who, after saying he would run for re-election no matter what Knowland would do, had caved in to pressure.
1958 was of course a good year for the Democrats nationwide. Yet at least one progressive Republican--Nelson Rockefeller--managed to prevail against the tide. (So did one conservative Republican, Barry Goldwater; but California in 1958 was not moving to the Right the way Arizona was, and organized labor remained strong in the Golden State.) So perhaps Knight could have, as well--at least if Brown had decided not to run against him. I am less sanguine about Knowland's chances.