Going back 35 years, a tiny mare named Ranji Bill was a prolific winner at Harold Park. She was a real crowd favourite and was driven in a lot of her races by Kim Moore when lady drivers were just breaking into the game. Kim later became a successful galloping trainer and married Australian cricketer Mark Waugh.
I'm not sure what height she was, but she was about as small as you will see.

(That is Ranji Bill I'm referring to, although Kim was also very petite)