Small horse's disadvantage (4)
I believe the answer is:
snag
'disadvantage' is the definition.
(I've seen this before)
'small horse's' is the wordplay.
'small' becomes 's' (abbreviation - e.g. clothes size).
'horse' becomes 'nag' (nag is a kind of horse).
's'+'nag'='SNAG'
(Other definitions for snag that I've seen before include "Unexpected drawback" , "Catch - disadvantage" , "A hidden or unexpected obstacle" , "Unforeseen obstacle" , "Hitch, obstacle" .)