Babies and toddlers love to carry it around.
I think this can be made with many kinds of yarn, but I just used some plain old brown yarn that had been used for another project and was just lying around. I used size six needles for it. Also, I think I would do it exactly the same if I did it again.
The pattern I bought somewhere, but here is a link to where you can buy a different, but fairly similar horse(pony) pattern on ebay.
Or use this free Horse Pattern
Here are instructions on how to do some of the stitches you will need to knit this horse(pony).
Cast Off (AKA "bind off" or "binding off")
Pick up a dropped Stitch