Why does my female cat grab a piece of clothing with her mouth and knead and sway back and forth?

My cat will sometimes walk up to a T-shirt or some other article of clothing I have laying somewhere, grab it in her mouth, and then do the kneading thing while swaying her . She also gets this glazed-over look in her eyes while she's doing it and I have to really try and snap her out of it. She is unaltered so Im uming this has something to do with her heat cycle, but Im not sure and I dont really know what this means in the whole scheme of things. Should I stop her from doing this? Is it theutic for her or something? Is there something Im not providing her (besides a boy cat which isnt going to happen) that I should be?