Source : Webster's Revised Unabridged Dictionary (1913)

Chenille \Che*nille"\ (sh[-e]*n[=e]l"), n. [F., prop., a
   caterpillar.]
   Tufted cord, of silk or worsted, for the trimming of ladies'
   dresses, for embroidery and fringes, and for the weft of
   Chenille rugs.

Source : WordNet®

chenille
     n 1: a soft tufted cord used in embroidery
     2: a heavy fabric woven with chenille cord; used in rugs and
        bedspreads