This phrase or proverb is to remind you to be grateful for what you are given. It comes from the idea that if you are given a horse as a gift, you should not open it’s mouth to examine it’s teeth to see how old it is [the phrase “long in the tooth” also comes from this indicator of a horse’s age]. Be grateful you got the horse in the first place. An old horse is better than no horse at all. And it’s much better than a bagel twist.
Some people in our office thought that this phrase was associated with the Trojan horse. If you are given a large wooden horse instead of the real kind, feel free to look in its the mouth since it might have armed invaders inside. That is not the same thing nor does it have any relation to the above phrase. So look away!
By the way, this saying does not apply to bagel twists. Even if you get a free bagel twist, run away and leave it in the dust. No bagel twist is always better than a free bagel twist.