After meeting a World War I veteran, Wilfred Ellis, who drank in his local pub at Iddesleigh and who had been in the Devon Yeomanry working with horses, Morpurgo began to think of telling the story of the universal suffering of the Great War through a horse's viewpoint, but was unsure that he could do it. He also met another villager, Captain Budgett, who had been in the cavalry in the Great War, and a third villager, Albert Weeks, who remembered the Army coming to the village to buy horses. Morpurgo thanks these three men in the dedication of the book.
With his wife, Morpurgo had founded Farms for City Children, a charity where inner city children live and work on rural farms for a week. Interviewed by Fi Glover on Saturday Live on BBC Radio 4 in December 2010, Morpurgo recounted the event that convinced him he could write the book:
One of the kids who came to the farm from Birmingham, a boy called Billy, the teachers warned me that he had a stammer and told me not to ask him direct questions because it would terrify him if he had to be made to speak because he doesn’t speak...I came in the last evening into the yard behind this big Victorian house where they all live, and there he was, Billy, standing in his slippers by the stable door and the lantern above his head, talking. Talking, talking, talking, to the horse. And the horse, Hebe, had her head just over the top of the stable, and she was listening; that’s what I noticed, that the ears were going, and I knew she knew that she had to stay there whilst this went on, because this kid wanted to talk, and the horse wanted to listen—this was a two way thing...I went and got the teachers, and brought them up through the vegetable garden, and we stood there in the shadows, and we listened to Billy talking, and they were completely amazed how this child who couldn’t get a word out—the words were simply flowing. All the fear had gone, and there was something about the intimacy of this relationship, the trust building up between boy and horse, that I found enormously moving, and I thought: Well yes, you could write a story about the First World War through the eyes of a horse, let the horse tell the story, and let the story of the war come through the soldiers—British soldiers first of all, then German soldiers, then a French family with whom the horse spends winters, and that maybe you’ll then get a universal idea of the suffering of the First World War. So I just...wrote like a horse for about six months.
Billy was not the child's real name. Morpurgo later recalled, "As I listened to this boy telling the horse everything he'd done on the farm that day, I suddenly had the idea that of course the horse didn't understand every word, but that she knew it was important for her to stand there and be there for this child."
Another inspiration for the book, after meeting the veterans and seeing Billy with Hebe the horse, was an old oil painting that Morpurgo's wife Clare had been left: "It was a very frightening and alarming painting, not the sort you'd want to hang on a wall. It showed horses during the First World War charging into barbed wire fences. It haunted me." The painting was by F. W. Reed and was dated 1917, and showed a British cavalry charge on German lines, with horses entangled in barbed wire. Morpurgo wrote a fictionalised version of this painting in his "Author's Note" at the start of the book. In his version, the painting shows a red bay with a white cross on his forehead, and the painting bears the legend: "Joey. Painted by Captain James Nicholls, autumn 1914.":)