The Horse in Harry's Room, by Syd Hoff/Illustrator Syd Hoff, HarperCollins
Harry has a wonderful pal. It is a horse that lives in his room, but one that no one else can see. He is a very skilled horseman because they ride around the room and never break or topple anything. At night, Harry's horse watches over him, and when he comes home from school, his pal is waiting. One weekend Harry's parents decide to take him out to see real horses and on the way back they remark that horses should be free. Once home, Harry races to his room and tells his horse that he is free to go. Happily for Harry, his horse decides to stay and Harry knows they will be together for as long as Harry wishes.