It is a late-1800s through early 1900s horse reins guide (also called a terret), still in its original position on part of the "back pad" from a horse's wagon or buggy-pulling harness. See the photos below. The illustration is scan from a 1907 Saddlery & Horse-Harness mailorder catalog.
After-posting Edit:
When I re-checked this discussion thread, I saw that DCMatt had clicked Send on his correct answer while I was still hunting through my computer's enormous relic-ID-photos folder for the best four to attach to my post. So, please give DCMatt the full credit for being the first to reply with the correct ID... in particular, because he thoughtfully included a photo showing your find "in use"... which gives about as complete an ID-answer as you could hope to get.