Directly translated El Caballito means “the little horse”.
The legend is that a great Mexican revolutionary requested a shot of tequila as his last right before execution, the tequila was poured into his personal shot glass, and as he lifted the glass to his lips a tiny golden horse could be seen at the bottom.
To this day, the long narrow shot glass used to drink tequila is known as a “Caballito”.
I wrote this short post a while ago but lately i stunbled upon another version. So Here it is for the sake of precision.
Here is the source
And the quote :
The story dates back to the time of the former agave haciendas, where the foremen used to go out on horseback to supervise work in the fields. They would hang on their necks a bull’s horn that had been hollowed out and cut to drink tequila. As legend has it, when they were asked why they wore it like this, the answer was simple: “it’s for tequila on the little horse (caballito).” And soon the small tequila glass became known by this name.