A good D&D campaign is imaginative and creative. Sometimes a little research is useful to improve a dungeon, flesh out a scenario, and provide inspiration for a campaign. Books on folklore, mythology, fairy tales, bestiaries, and knightly legends can often help the DM fill in important details of a campaign, but fictional tales and fantasy novels usually provide the best sources of inspiration.
Tom Moldvay, D&D Basic rulebook (1981)
*special thanks for assistance in compiling the list was extended to Barbara Davis, Children's Librarian at the Lake Geneva Public Library, in the credits to the rulebook
In reproducing Moldvay's list, authors and their works have been linked to wikipedia entries, where available. An exception are the many non-fiction titles, most of which have been linked to archive.org, where they can be accessed.
Writers and their books appearing in Appendix N are indicated by an asterisk (those appearing in my "Appendix O" subset are indicated by a second asterisk).
(I've taken the liberty of correcting several typos, but have otherwise reproduced the list as it appears on pg. B62. Certain entries can also probably be better organized, but I've left that job for another time...)
For those interested in delving deeper into the literary source material that inspired the development of D&D, the Appendix N Book Club podcast is highly recommended.
Fiction: Young Adult Fantasy
Cover to the first edition of A Princess of Mars (1917) by Edgar Rice Burroughs, published by A.C. McClurg. (Story originally serialized in All-Story Magazine from February - July, 1912). Illustration by Frank E. Schoonover.
Non-Fiction: Young Adult
Buehr, Walter - Chivalry and the Mailed Knight (1963)
see also d'Aulaires' Book of Greek Myths (1967)
Hazeltine, Alice - Hero Tales from Many Lands (1961)
Hillyer, Virgil - Young People's Story of the Ancient World: Prehistory - 500 B.C. (1966)
Jacobs, Joseph - English Folk and Fairy Tales (1890)
Cover to Castle (1977) by David Macauley, published by Scholastic. The fictional castle depicted was based on Conwy Castle in North Wales.
see also Castle, PBS special (1983)
Renault, Mary - The Lion in the Gateway (1964)
Sellow, Catherine F. - Adventures with the Giants (1950)
Williams, Jay - Life in the Middle Ages (1966)
Winer, Bart - Life in the Ancient World (1961)
Fiction: Adult Fantasy
Offutt, Andrew - The Iron Lords (1979); Shadows Out of Hell (1980)
Swann, Thomas Burnett - Cry Silver Bells (1977); The Tournament of the Thorns (1976); Moondust (1968), et al.
Cover to the first single-volume edition of The Lord of the Rings (1968) by J.R.R. Tolkien, published by Allen & Unwin. Illustration by Pauline Baynes.
see also The Silmarillion (1977)
Wagner, Karl Edward - Bloodstone (1975); Death Angel's Shadow (1973); Dark Crusade (1976), et al.
Some additional authors of fantasy fiction are:
Short Story Collections
Cover to The Age of Chivalry and Legends of Charlemagne (1992) by Thomas Bulfinch, published by Doubleday. (Originally published separately in 1859 and 1863, respectively). Illustration The Accolade (1901) by Edmund Leighton.
see also Legends of Charlemagne (1863)
Funk and Wagnalls Standard Dictionary of Folklore, Mythology, and Legend (1949, 1950, 1972)