One important part about learning how the Linux kernel works is understanding the details of the system's interface the kernel provides. In my opinion, there is no better book out there than the "Linux Programming Interface" by Michael Kerrisk: http://man7.org/tlpi/
It provides extremely detailed information about everything going on in Linux, as well as example programs and exercises to help you further your knowledge. While it doesn't get deep into kernel theory like Tanenbaum's books tend to do, it will provide you with a greater understanding of how things work, IMO.
This book is great, so is Advanced Programming in the Unix Environment, which covers much of the same material but details the differences in standards and implementation. I'd also add `Linux Kernel Development` by Robert Love.
It provides extremely detailed information about everything going on in Linux, as well as example programs and exercises to help you further your knowledge. While it doesn't get deep into kernel theory like Tanenbaum's books tend to do, it will provide you with a greater understanding of how things work, IMO.