Originally, this term was racing slang which basically meant ‘a hot tip’.
After the 1930s however, the saying was used to encompass any kind of evidence given on the best authority.
It alludes to the fact that the most reliable way of determining a horse’s age is by simply inspecting its teeth.
A dealer may try to bend the truth, but the evidence of the horse’s mouth is absolutely dependable.
These days, the saying is strengthened by saying “straight from the horse’s mouth.”