My example isn't a horse but would work the same since both most likely have somewhat larger areas you can do this on. This is one of my techniques, I use a different approach when I am using colors that are transparent but in this case, both are opaque.
Here's what the final result looks like. That part that we're talking about is the black that runs just behind the length of the banner pole.
It's fairly easy to pull off but it takes some practice.
First (left pic) I repaint the area the base color... this way it's "wet."
Then I add my second color where I want it to go. Here it's a thick line of black under the banner pole.
Second (middle pic) I clean my brush and leave it slightly damp and begin blending the black into the green.
Third (right pic) I'll clean my brush again, leaving it slightly damp and then blend the green back into the black.
I keep repeating this until I get the gradation I like. Something to remember though is the paint dries fast so you don't have too long to work unless you add some kind of medium to slow drying time.
UPDATE: I've since posted again about wet blending in a more in-depth article that can be found here.