Yes, but I'm not sure if the knight can take it himself:
"Vehicles with Daemonic Possession or that are Daemon Engines cannot take the Legacies" - yes, technically he hasn't got the Daemonic Possession upgrade, but I'd suggest that since he's gained Daemon - and you're essentially arguing* Daemon Of Khorne to boot - it's kind of ignoring the intent to say he's not a Daemon Engine.
So I'd suggest - Yes, it will boost the Chaos Knight's invulnerable save, and (since the rule doesn't reference the 'daemon' rule) will actually boost both his native 5+ save to a 4+ and the ion shield 4+ to a 3+, but I would say you'll need another vehicle to actually 'caddy' the upgrade.
* With the backing of a lot of people, including unofficial Forgeworld emails - I'm not contesting the interpretation
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