While I'd recommend tossing (in the garbage) any tennis balls with signs of fraying or peeling rubber, it's a good idea to wash those you'll be keeping this season [1]. Think of all the dirt from endless games of fetch and throw them in the washing machine with some towels and pet-safe detergent [2].
After the fuzzy balls are cleaned up, you can air out or pop them in a dryer for a special trick. If you add a tennis ball to the dryer, it can help fluff up your drying towels, down bedding or other clothes that need an extra puff and fluff – bonus!
Source [3]