Blood horse is a traditional term for a horse of refined, pure breeding — specifically one descended from the hot-blooded Arabian, Barb, and Turkoman stallions imported to Britain in the seventeenth and eighteenth centuries. In its strictest historical sense it refers to the Thoroughbred, whose entire breed is traced through the paternal line to three foundation sires: the Darley Arabian, the Godolphin Arabian, and the Byerley Turk. All registered Thoroughbreds trace in male line to one of these three.
The phrase distinguishes horses of this type from cold-blooded draft breeds and warm-blooded sport horses, which carry varying proportions of draft blood. “Hot blood” in the equine sense does not refer to temperature; it refers to the combination of refinement, sensitivity, speed, and high metabolic rate that characterize desert-bred horses. A blood horse in this sense is characterized by a fine skin through which blood vessels show clearly, a lean body, a long fine head, and a tendency toward reactivity and sensitivity in temperament.
In looser usage, “blood horse” may describe any purebred horse or any horse with significant Thoroughbred content in a cross. The three founding sires the entire Thoroughbred traces to define a lineage system also used in Arabian registration; both breeds maintain strict bloodline records back to verified foundation stock. The Jockey Club in the United States maintains the American Stud Book, the definitive registry for Thoroughbred blood horses in North America.
Further Reading: The Thoroughbred Wikipedia article traces the founding sires and stud book history of the prototypical blood horse; The Jockey Club is the official keeper of the American Stud Book and the definitive registration authority for Thoroughbred blood horses in North America.