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Did Tolkien base the Shire on Shire 🐴horses?

No, a shire is a administrative locality, equivalent to a county. Many place names in Great Britain have shire a the end: Devonshire, Shropshire, Leicestershire, etc., though it's pronounced something like "sheer" or "shuhr" in these names, and not ˈshī(-ə)r as in the land inhabited by hobbits. Shires are usually rural (much like the hobbit land) hence the probable reason Shire horses are so named, i.e. they are farm horses bred for heavy farm work.


 
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