Humans constantly improve warfighting skills. Dragons don't.
Humans use tools to fight. And since they are the very definition of an arms race, the tools get better every year.
Whereas dragons mainly fight with their God-given sharp and burny parts, and don't arms-race with silly gadgets.
Just at extremes, a dragon would be able to achieve a total wipe-out of a first-string Roman legion. But a modern junior-varsity force, such as Estonia's army with its MAPATs, Javelins and radar-guided AA guns... or Turkey's G-class frigates with SM-1MR missiles, could exterminate the dragons by pushing buttons.
Whereas dragons mainly fight with their God-given sharp and burny parts, which are not subject to arms racing expect over millennia.
All this to say, it is inevitable that there'll be a point where the knights are able to hit the dragons hard enough to make the dragons think twice. That is not yet license to kill dragons; a dragon fight would still exact a heavy toll, and of course the knights remain totally vulnerable to countervalue damage e.g. against undefended villages. So either party will pay a heavy price for fighting.
At that point, each side could destroy the other, but the price they'd pay is not worth it. Neither side would have any opportunity for a debilitating "first strike" as would occur in nuclear war, as the knights are too dispersed, and the dragons are too many.
The knights may have reached a "live and let live" philosophy of "no reason to attack the dragons if they aren't attacking us". The dragons clearly have that philosophy already, since humans survived the period when the dragons could crush them.
Against this balance of terror, you also have trade. If knights and dragons have cause or ability to do business with each other, nothing stops war like trade. That's a big part of why America has so many trade agreements.