1832, American English colloquial, from horse (n.), perhaps in referfence to the animal's qualities, or the abilites of hostlers and coachmen with the animals, perhaps from the same association of "strong, large, coarse" found in horseradish.
Good sense and shrewdness: horse sense needed before taking on something like that(1832+)
The Dictionary of American Slang, Fourth Edition by Barbara Ann Kipfer, PhD. and Robert L. Chapman, Ph.D. Copyright (C) 2007 by HarperCollins Publishers. Cite This Source
Idioms and Phrases with horse sense
Sound practical sense, as in She's got too much horse sense to believe his story. The exact allusion in this term, which dates from the mid-1800s, is disputed, since some regard horses as rather stupid. However, they tended to be viewed more positively in the American West, where the term originated.