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You could to use "O seu cavalo come pão" but in this case you lose the gender of the horse owner, also the person ('seu cavalo' can means her horse, his horse, your horse... because the possessive correspond to the noun in Portuguese). "O cavalo dela come pão" has always the same meaning, independent of context.
In fact, both "should" be the same, so nobody would complain if you choose to say it every time like in "dela". As the sound of "e" and "i" are not too different in Portuguese, people tend to say the "e" sound closer to the "i" when it is not in a tonic syllable. The same happens with words like "demais" ('too much') because "mais" is the tonic syllable, not "de".