Question: When Allah is aware of all the hidden and apparent things, why it is necessary for women to cover themselves during Prayers?
Answer: There is no doubt that Allah is aware of everything and all conditions and hidden and apparent are not applicable to him. He is not a stranger to His servants. We human beings while worshipping feel that we are in the presence of God, we talk to Him, and supplicate Him. The person should wear the most appropriate clothes and it is obvious that the appropriate and perfect dress for women is that which befits their chastity and which gives the best reflection of themselves. During worship such type of clothes are best suited. For men also it is not that they could pray naked, it makes the prayer invalid and is against the spirit of worship and respect of Allah, but it is better that along with necessary clothes we should pray with clothes that show respect, for example it is not good to pray just with an undergarment. One should also wear shirt… etc over it.
source : http://www.maaref-foundation.com