There is not really anything contradictory about stating it this way just because Christ is understood to be pre-existent.1 This can be understood looking at it from two perspectives.
You make the statement:
I would never say "I foreknow my son" if he is sitting next to me.
Yet I believe you can imagine a scenario for yourself (or generally for a person), where you are sitting with your son and his child, discussing the past, and you might make a statement to your grandchild that parallels the same concept here:
You: "I knew my son before you were born, so let me tell you..."
[parallel, only from Peter's third person perspective]
Peter: "He was foreknown before the foundation of the world"
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[Christ, v.19 [by the Father [i.e. before any of us
the Son, v.3] (implied, v.17)] came into being]
You would phrase it "knew ... before," whereas Greek has a word (προγινώσκω) that includes that idea. Additionally, because a time reference is being given, you could even state a similar idea to your son...
You: "I knew you before you were born."
...depending upon what you meant by "knew" (i.e. perhaps you had viewed him in an ultrasound, observed that he was always kicking mommy at a certain time of the day, or whatever).
However, the context in 1 Peter 1 also adds another dimension of foreknowledge that we humans do not have, for what specifically is being referenced as being foreknown of Christ is the work He would do long after the foundation of the world:
17 If you address as Father the One who impartially judges according to each one’s work, conduct yourselves in fear during the time of your stay on earth;18 knowing that you were not redeemed with perishable things like
silver or gold from your futile way of life inherited from your
forefathers, 19 but with precious blood, as of a lamb unblemished and
spotless, the blood of Christ. 20 For He was foreknown before the
foundation of the world, but has appeared in these last times for the
sake of you 21 who through Him are believers in God, who raised Him from the dead and gave Him glory, so that your faith and hope are in God. (NASB)
Who Christ was yet to become (as human) and what He was yet to do (offer Himself as a spotless sacrifice) on our behalf were foreknown before creation.
I venture that no human father knows for sure what their son will become (as a person) and what works he will do in history beforehand, so in this way, Christ was foreknown by His Father differently than any normal son can be foreknown of his father.
Making a statement of foreknowledge about a person who is already in existence, and even a person one may perhaps be "sitting next to," when done in relation to a specific mark in time, and especially to a third party, does not contradict that person's existence. Nor is an odd way of using language when speaking about the fact that one did "know ... before" something about that person in relation to the fixed-point time reference.
1 The idea of the pre-existence of Christ is of course a presupposition brought to this exact text, since 1 Pet 1:20 does not explicitly state that Christ is pre-existent. Without other Scripture indicating otherwise (e.g. John 1:1 with John 1:14), the verse could as well be saying Christ was "pre-planned" before the foundation of the world. However, foundations for the assumption of pre-existence are still near to the context of the verse, for the "Spirit of Christ" was in the prophets before Christ ever being born—
1 Pet 1:10-11 (NKJV)
10 Of this salvation the prophets have inquired and searched
carefully, who prophesied of the grace that would come to you, 11
searching what, or what manner of time, the Spirit of Christ who was
in them was indicating when He testified beforehand the sufferings of
Christ and the glories that would follow.
So the context already alludes to His Spirit existence prior to His own birth.
Additionally, an inference can be made (whether right or wrong may not be possible to prove) that since Abel fits Jesus' definition of a prophet, and the first prophecy containing any idea of "salvation" and "the sufferings of Christ" was the the protoevangelium in Gen 3:15, Abel might conceivably be included in those prophets who "Of this salvation ... have inquired and searched carefully." If so, the statement of v.11 would at least locate "the Spirit of Christ" existing in a time period just after the "foundation of the world," in which case the 1 Pet 1:20 reference is simply pushing the existence back a bit further and tying the foreknowledge to an existent person, not just a pre-planned person (which also of course matches passages such as Col 1:16, John 1:3, etc. that indicate Christ's role in creation).
In short, while the doctrine of the pre-existence of Christ is being brought to the question under consideration and therefore its assumed relation to the 1 Pet 1:20 statement, the assumption appears to be a valid one, even within the context of 1 Peter 1.