Horse armour is one of the many different types of mount armour added by the mod, which, surprisingly, helps protect horses from various types of damage. There are thirteen Middle-earth variations, and the three vanilla ones are now craftable for Middle-earth horses.
Note that like the horses, the vanilla horse armour and Middle-earth horse armour are listed as separate items, even though they may look and act the same (e.g. diamond horse armour). You can not put vanilla horse armour on a Middle-earth horse or vice versa.
Some horses, namely those ridden by NPCs, may naturally spawn wearing horse armour. Examples of this include horses of the Rohirrim, Swan Knights, Gondor Soldiers, and more. The armour can drop rarely when the horse is slain.