It was published before 1970, I think, and it was a picture book for young children, about a little boy on a farm who loved one of the horses and liked to pretend it could fly. At the end, the old horse dies, and the boy sees it's spirit flying through the sky. I've tried one or two books search sites with no success. It's not the Mary Stewart one which has been suggested. I just wonder if anyone remembers reading it!