And don't feel too dumb, I did the same thing at the beginning the first time I played. And I had a hard time with the same battle.

What I do is keep a Wizard towards the right of everybody, then move him up to the little platform, and you should be able to get both the knight and the one mage with a spell. You have to be careful that the wizard is at full HP though, because that damn archer likes to snipe him to begin.