In addition to that ruling, Judge Ronald Coen also lowered Knight's bail to $10 million from $25 million, a figure that defense lawyers called excessive.
The judge also dismissed one of the two counts of hit-and-run against Knight.
In all, Knight will stand trial on one count of murder, one count of attempted murder and one count of hit-and-run, the judge ruled after holding a two-day preliminary hearing this week that ended Thursday.
Knight, 49, faces up to life in prison if convicted. Knight suffers diabetes and blot clots, and the case has clearly strained him: He collapsed in court last month
after learning of the $25 million bail and he was taken to the hospital for treatment.
Knight was in court Thursday. At the end of hearing, he turned around and looked at his family in the gallery, and he smiled to his fiancee as deputies led him handcuffed out of the courtroom.
In a press conference after the hearing, fiancee Toi Kelly said regarding Knight's health that he is "doing much better."
Why one count dismissed
The judge dismissed the other hit-and-run count because California law says no more than one charge of hit-and-run should be brought against a defendant when the same weapon, in this case the vehicle Knight was driving, is used against several people.
Knight is accused of running over two men, killing one of them, during an argument.
Killed was Terry Carter, 55.
The survivor is Cle Sloan, 51, who in testimony this week declined to identify Knight as his attacker because Sloan doesn't want to be a "snitch" who sends Knight to prison, according to CNN affiliates KABC and KTLA.
Prosecutors offered Sloan immunity, but he still refused to testify against Knight on Monday, the affiliates reported.
The deadly incident happened on January 29, after a flare-up on the set of the biopic "Straight Outta Compton," a film about the highly influential and controversial rap group N.W.A. The alleged argument spilled over to the parking lot of Tam's Burgers in Compton.
At the time, Knight was out on bail in a separate robbery case. The hit-and-run was captured on videotape and allegedly shows Knight inside a red truck.
What happened, according to a video
In the video, the truck pulls into the entrance of the Compton restaurant, and he is then approached by Sloan, who was working security on the site.
The two men appear to talk for a few moments, with Knight still in his vehicle. Suddenly, the vehicle backs up, knocking Sloan to the ground. While still in reverse, the truck moves out of range of the security camera.
The vehicle is then seen zooming forward, back into camera range, running over Sloan a second time, and then running over a second man, Carter, a former rap music label owner.
Carter later died.
Defense: Surviving witness was the 'aggressor'
In closing arguments prior to the judge's ruling, Knight's attorney Matthew Fletcher argued that Knight was the victim.
Knight was only defending himself against Sloan, whom the defense attorney accused of possessing a gun at the time.
"Mr. Sloan is the initial and consistent aggressor," Knight's attorney argued. "There's no intent to kill, there's an intent to survive."
"Even without a gun, we know Mr. Sloan was brave enough to attack in broad daylight," the defense attorney said.
Fletcher added that Knight's defense was to stand his ground.
Sloan "needed immunity because he was the actual aggressor," Fletcher said. "He is the person who got Terry (Carter) killed."
Prosecution: Knight 'lost the right of self-defense'
Los Angeles County Deputy District Attorney Cynthia Barnes argued, however, told the judge that Knight was engaged in "mutual combat situation" where he used his car as deadly weapon.
If Knight "ever had the right of self-defense, the moment he backed-up and Mr. Sloan was ran-over, he lost the right of self-defense," Barnes said. "There was pre-mediation and intent when he (Knight) ran over him a second time."
Knight is scheduled to be arraigned on April 30.
The incident is the latest run-in with the law for Knight, who founded the wildly successful Death Row Records in 1991 and signed artists such as Snoop Doggy Dogg (now known as Snoop Lion) and Tupac Shakur.
Knight was driving the car in which Shakur was a passenger when the rapper was shot to death in Las Vegas in 1996.
Shortly afterward, Knight spent several years in prison for violating parole on assault and weapons convictions. That prison time -- along with Shakur's death, feuds between Knight and a number of rappers, and desertions by Dr. Dre, Snoop and others -- contributed to the label's bankruptcy in 2006.
In August, Knight and two other people were shot while inside a celebrity-filled Sunset Strip party hosted by singer Chris Brown
on the eve of the MTV Video Music Awards.