This is an abstract of a paper from Equine Veterinary Journal about magnetic blankets. While it doesn't say conclusively that they are of no benefit, it does show that they do not work a commonly believed, by increasing circulation:
Does a magnetic blanket induce changes in muscular blood flow, skin temperature and muscular tension in horses?
Authors: A. Edner, L.-G. Lindberg, H. Broström, A. Bergh
Reasons for performing study
Static magnetic blankets are often claimed to induce increases in blood flow, reduce muscle tension and tenderness, and be beneficial in both prevention and treatment of musculoskeletal injuries in horses. However, there are no studies that confirm alleged beneficial effects of magnets on muscles of the back in healthy horses.
To investigate whether static magnets sewn into a blanket affect back muscle blood flow, skin temperature, mechanical nociceptive threshold (MNT) and behaviour in healthy horses.
Prospective, randomised, blinded, placebo-controlled crossover study.
The following outcome measurements of the back of 10 healthy horses were performed; blood flow by photoplethysmography, skin temperature by use of thermistors in conjunction with digital infrared thermography, and MNTs by algometry. The horses’ behaviour was filmed during the procedure and scored on an ethogram. Measurements were performed repeatedly for a 30 min baseline period. Thereafter a blanket with active, static magnets (900 gauss) or placebo magnets was placed on the horse and measurements were performed for a 60 min treatment period and a 30 min post treatment period. The study procedure was repeated on the consecutive day, when the horse received the alternative treatment.
Blood flow in muscle, skin temperatures, MNTs and behavioural traits did not differ between active and placebo magnetic blankets. Skin temperature increased similarly during both active and placebo blanket treatment.
In healthy horses, magnetic blankets did not induce additional significant effects on muscle blood flow, skin temperature, MNTs and behaviour when compared with nonmagnetic blankets.