MRI states grade 2 degenerative changes of the posterior horn of the medial meniscus with moderate amount of joint effusion. Whats the best treatment?

Weight bearing Xrays. Weight bearing Xrays become important in a situation like you describe. Such images allow your physician to see your knee as a worst case scenario and determine if you have any significant component of underlying arthritis or loss of cartilage in the medial compartment. Your orthopaedic surgeon also needs to help determine if the meniscal irregularity is your actual pain generator.
Treatment. is not based on MRI findings alone. Treatment depends on integrating your history, physical, and MRI findings together so as to tell the complete story. This integration is commonly done by a physical medicine doctor or orthopedist.